FUNCTIONS OF THE BUREAU OF CUSTOMS authorities and made subject to the penalty of

I. PRIMARY FUNCTIONS forfeiture or fine for violation of customs laws.

1. To assess and collect customs lawful duties, fees and o Here, the issue involved is the legality of the
charges, fines and penalties related to importation importation of goods either because the
accruing under the tariff and customs law; goods are in themselves prohibited
2. To prevent and suppress smuggling and other frauds importations or their importations are
in violation of the Tariff and Customs Code. effected contrary to law.

II. SECONDARY FUNCTIONS Question: Who is authorized to make a ruling on commodity

1. To supervise and control entrance and clearance of classification of imported article not specifically classified in
vessels and aircraft in foreign commerce; the Tariff and Customs Code?
2. To enforce tariff and customs laws and all other laws, Answer: The Tariff Commission, upon the request of any
rules and regulations relating to tariff and customs interested party.
administrations; o Any ruling, however, of the Tariff Commission shall be
3. The supervision and control over the handling of binding upon the BOC unless the Secretary of Finance
foreign mails arriving in the Philippines, for the rules otherwise.
purpose of the collection of the lawful duty on the
dutiable articles thus imported and the prevention of What is the extent of the CUSTOMS OFFICER’S POWER TO
smuggling thru the medium of such mails; SEARCH, SEIZE and ARREST under the Tariff and Customs Law?
4. Supervision and control over all import and export Answer: Customs officials and agents can search any building
cargoes, landed or stored in piers, airports, terminal or other places except dwelling houses (especially if the articles
facilities, for the protection of government revenue; involved are subject to excise tax) and seize any discovered
and contraband when there are reasonable grounds to believe
5. Exclusive original jurisdiction on SEIZURE and that they are stored and found in said place, to enforce the
FORFEITURE CASES under the Tariff and Customs TCC, EVEN WITHOUT A SEARCH WARRANT.
Laws. o A DWELLING HOUSE is one used for residence.
However, a storage place or warehouse does not
TERRITORIAL JURISDICTION OF THE BOC become a dwelling just because a watchman/guard
 Over all seas within the jurisdiction of the Philippines and lives in the place or his family stays there.
over all coasts, harbors, airports, rivers, ports, bays, and inland
waters charp-bi, whether navigable from the sea or not. o The seizure of goods concealed to avoid the duties on
them is not embraced within the prohibition of this
 The BOC exercises special surveillance to protect customs constitutional guarantee.
revenue and prevent smuggling. This is conducted over the
coast, beginning when a vessel or aircraft enters PH territory o This is in effect an exception to the constitutional
until the articles have passed thru the customhouse after guarantee against searches and seizures without
paying the duties or being given legal permit. warrants issued by a judge without probable cause,
since historically in the US and England, such a search
 When a vessel becomes subject to seizure by reason of an was expected.
act done in PH waters in violation of the tariff and customs
laws, a pursuit if such vessel begun within the jurisdictional o Only proper parties in interest can invoke the
waters may be continued beyond the maritime zone, and the constitutional right against unlawful search and
vessel may be seized on the high sea. seizure.

 To the end of preventing smuggling, it is the right of a o Customs officials may seize vessels, aircrafts, cargoes,
custom official to seize goods that are suspected to have been goods and animals when subject to forfeiture or fine.
introduced into the country in violation of the revenue laws not
only in his own district, but also in any other district than his  Under the Tariff and Customs Code, the Commissioner of
own. Customs has jurisdiction to determine the legality of an
o Thus, should a vessel loaded with untaxed motorcycles importation or ascertain whether the conditions prescribed
and electronic products leave the port of Pangasinan by law for an importation have been complied with.
bound for Ilocos Sur, the Collector of Customs of Ilocos
Sur has the power to apprehend the culprits  The Commissioner may also order the seizure of untaxed
responsible for smuggling and seize the untaxed goods without being liable for usurpation of judicial
goods. Vierneza v. Commissioner of Customs function.

TAX CASES COVERED BY TARIFF AND CUSTOMS CODE  May an importer whose goods are seized file an action in
1. PROTEST CASES or those where the importer the regular courts for injunction and damages against the
questions the legality of the assessment and collection BOC to have the goods released?
of customs duties and other fees or charges (except Answer: No. Primary jurisdiction is with the Collector of
the fixing of fine in seizure cases). Customs. From the moment imported goods are actually in
o The issue involved in these cases generally the possession or control of the Customs authorities, even
relates to the correctness of appraisal and/or if no warrant for seizure or detention has previously been
classification of imported goods. issued by the Collector in connection with its seizure and
forfeiture proceedings, the BOC acquires exclusive
2. SEIZURE CASES or those wherein goods or jurisdiction over such imported goods for the purpose of
merchandize are ordered seized by customs enforcing customs laws. The decision of the Commissioner

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 of Customs is appealable to the CTA whose decisions are 1. AD VALOREM TAX - is a tax, duty, or imposition based on
appealable to the SC. the SPECIFIED VALUE of the goods.
2. SPECIFIC TAX - is based on the weight or volume capacity
 Who are CONFERRED POLICE AUTHORITY to effect and other physical unit of measurement.
searches, seizures and arrest under the customs and tariff
laws? SEC. 1611, RA 10863 - xxx There shall be levied, collected and
a) Officials of BOC, district collectors, deputy collectors, paid upon all imported goods the rates of duties indicated
police officers, agents, inspectors and guards. thereon except as otherwise specifically provided for in this
b) Officers of Philippine navy and other members of the Act: Provided, that the maximum rate shall not exceed 100%
AFP and national law enforcement agencies when ad valorem.
authorized by the Commissioner.
c) Officials of BIR in all cases falling within the  There are 6 methods of valuing the articles which are
performance of their duties, when payment of internal imported. This are listed in sequence, meaning, if the
revenue taxes is involved. value cannot be determined using the first method,
d) Officers generally empowered by law to effect arrests, the next method will be resorted to: IIS-DCF
and execute processes of courts when acting under 1. Transaction value/Invoice value -- price actually
the direction of the Collector. paid/payable for the goods when sold for export to
the Philippines.
The above do not need a warrant to make searches,
seizures and arrests, owing to the expressed mandate and 2. Transaction value of Identical goods -- identical
authority granted to them in the performance of their goods are those which are the same in all respects.
functions as provided under the TCC. There are minor differences, but these differences do
not influence the price.
 POWERS THAT MAY BE EXERCISED UNDER SUCH POLICE
AUTHORITY in the enforcement of TCC: RES 3. Transaction value of Similar goods -- Siimilar goods
1. Require assistance of any police officer are those that, although not alike in all respects,
2. Enter and search any enclosure, except dwelling have like characteristics and component materials
o Search of dwelling may be effected only upon which enable them to perform the same functions
warrant issued by a judge of the court or such and to be commercially interchangeable.
other responsible officers as may be authorized by
law. 4. Deductive value -- based on the unit price at which
3. Search: VVP the imported goods or identical or similar imported
a. vessel or aircraft and persons or articles goods are sold in the Philippines in the same
conveyed therein condition as when imported in the greatest
b. vehicles, beasts and persons aggregate quantity.
c. persons arriving from foreign countries.
5. Computed value -- the amount or price when all the
TARIFF AND CUSTOMS CODE, as amended by CUSTOMS components of the article are added up.
MODERNIZATION AND TARIFF ACT
6. Fallback value -- determined using other reasonable
TARIFF can mean: LD means and on the basis of data available in the
a) List or schedule of articles with the corresponding duties Philippines.
imposed on the same; or
b) Duties imposed on the articles which are payable to the Sec. 105. EFFECTIVE DATE OF RATE OF IMPORT DUTY. -
government. Imported goods shall be subject to the import duty rates under
the applicable tariff heading (1) at the date of importation or
CUSTOMS DUTIES - are: (2) upon withdrawal from the warehouse for consumption.
a. Taxes on the importation and exportation of  In case of withdrawal from free zones for introduction to
commodities; the customs territory, the DUTY RATE AT THE TIME OF
b. The tariff or tax assessed upon merchandise imported WITHDRAWAL shall be applicable on the goods originally
from, or exported to, a foreign country. admitted, whether withdrawn in its original or advanced
form.
Purpose of Imposition:
 Customs duties are imposed for both REVENUE-RAISING  In case of goods sold at CUSTOMS PUBLIC AUCTION, the
and for REGULATORY purposes. duty rates at the DATE OF THE AUCTION shall apply for
 The levying of customs duties on imported goods may purposes of implementing Section 1143(a) of this Act.
have, in some measure, the effect of PROTECTING LOCAL
INDUSTRIES -- where such local industries actually exist SPECIAL DUTIES - DC-MDS
and are producing comparable goods. 1. DUMPING DUTIES
 Simultaneously, however, the very same customs 2. COUNTERVAILING DUTIES
duties inevitably have the effect of producing 3. MARKING DUTIES
governmental revenues. 4. DISCRIMINATORY DUTIES
5. SAFEGUARD MEASURES
2 KINDS OF DUTIES:
1. ORDINARY/REGULAR DUTIES I. ANTI-DUMPING DUTIES - SIL-DD
2. SPECIAL DUTIES  Refers to a special duty imposed on the importation of a
product, commodity or article of commerce into the
ORDINARY/REGULAR DUTIES Philippines at less than its normal value when destined

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 for domestic consumption in the country of export or or origin in respect of the product imported into the
origin, it being the difference between the export price Philippines that CONFERS A BENEFIT TO THE FOREIGN
and the normal value of such product. EXPORTER OR PRODUCER of said product.

 Whenever any product, commodity, or article of  There must be a causal link between the importation of
commerce imported into the Philippines at an export price the subsidized product AND:
less than its normal value in the course of trade for the  The material injury or threat thereof; or
like product, commodity or article destined for  The material retardation of the growth of the
consumption in the exporting country: domestic industry involved; or
a. Is Causing or is threatening to cause material injury  The prevention of the establishment of the
to a domestic industry; or domestic industry involved.
b. Materially retarding the establishment of a domestic
industry producing the like product; III. MARKING DUTIES
the Secretary of Trade and Industry, in the case of non-  A special duty imposed on imported articles or containers
agricultural product, commodity or article, or the that have not been properly marked in ANY OFFICIAL
Secretary of Agriculture, in the case of agricultural LANGUAGE of the Philippines as to indicate the NAME OF
product, commodity or article, after formal investigation THE COUNTRY OF ORIGIN of the article.
and affirmative finding of the Tariff Commission, shall
cause the imposition of an ANTI-DUMPING DUTY equal to  Tariff Commissioner, with approval of Secretary of Finance
the margin of dumping on such product, commodity or may authorize the EXCEPTION of any goods from the
article and on like product, commodity or article therafter requirements of marking if: I-C5-U2-P2
imported to the Philippines under similar circumstances, a. Goods are Incapable of being marked;
in addition to ordinary duties, taxes and charges imposed b. Goods Cannot be marked prior to shipment to the
by law on the imported product. Philippines without injury;
 However, the anti-dumping duty may be less than c. Goods Cannot be marked prior to shipment to the
the margin if such lesser duty will be adequate to Philippines except at an expense economically
remove the injury to the domestic industry. prohibitive of their importation;
d. Container-marking of the goods will reasonably
 Even when all the requirements for the imposition indicate the origin of such goods;
have been fulfilled, the decision whether or not to e. Goods are Crude substances;
impose a definitive anti-dumping duty remains the f. Goods Cannot be marked after importation except at
prerogative of the Commission (Tariff). It may an expense which is economically prohibitive, and
consider, among others, the effect of imposing anti- the failure to mark before importation was not due
dumping duty on the welfare of consumers and/or to any purpose of the importer to avoid
the general public, and other related local industries. compliance;
g. Goods are imported for Use, not intended for sale in
There has to be: DIC their imported or any other form;
1. Dumping - selling at less than fair value h. Ultimate purchaser, by reason of the goods’
2. Injury character or the circumstances of its importation,
a) Causing or threatening to cause material injury to a must necessarily know the country of origin of such
domestic industry goods, even though they are not marked to indicate
b) Materially retarding the establishment of a domestic their origin;
industry producing the like product. i. Goods are to be Processed in the Philippines by the
3. Causal relationship between dumping and injury importer or for the importer’s account other than for
the purpose of concealing the origin of such goods
II. COUNTERVAILING DUTIES and in such manner that any mark contemplated by
 A special duty imposed on products, commodities or this section would necessarily be obliterated,
articles, upon the production, manufacture or export of destroyed, or permanently concealed;
which any subsidy is directly or indirectly granted in the j. Goods Produced more than 20 years prior to their
country of origin and/or exportation, and the importation into the Philippines.
exportation of which into the Philippines will likely injure
an industry in the Philippines or retard the establishment  Sec. 710(B) -- Whenever goods are exempt from the
of such industry. requirements of marking, the IMMEDIATE CONTAINER, if
any, of such goods, or such other container or container
 Who imposes? of such goods, shall be MARKED as to indicate the to an
 The STI or SA shall issue a department order ULTIMATE PURCHASER in the Philippines the NAME OF
imposing a countervailing duty EQUAL TO THE THE COUNTRY OF ORIGIN of such goods in any of the
ASCERTAINED AMOUNT OF THE SUBSIDY. official language of the Philippines, subject to all
provisions of this section, including the same exceptions
 The same levy shall be imposed on the like product, as are applicable to goods under paragraph (3) of
commodity or article thereafter imported to the subsection (A).
Philippines under similar circumstances. The
countervailing duty shall be in addition to any ordinary  RELEASE WITHHELD UNTIL MARKED - No imported goods
duties, taxes and charges imposed by law on such held in customs custody for inspection, examination, or
imported product, commodity or article. assessment shall be released (A) until such goods or their
containers shall have been MARKED and (B) until the
 SUBSIDY - refers to any specific assitance provided directly amount of duty estimated to be payable under
or indirectly by the government of the country of export subsection [C] has been deposited.

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  FAILURE OR REFUSAL of owner or importer to mark
the goods within a period of 30 days after due
notice shall constitute as an ACT OF FLEXIBLE TARIFF CLAUSE
ABANDONMENT, and shall be subject to the rules  The PRESIDENT IS EMPOWERED TO: IEBI
on disposition of abandoned goods. a. Increase, reduce or remove existing rates of import
duty
IV. DISCRIMINATORY DUTIES  The existing rates may be increased or
 This is a special duty imposed upon articles of a FOREIGN decreased to any level, but in no case shall the
COUNTRY THAT DISCRIMINATES AGAINST PHILIPPINE increased rate of import duty be higher than a
COMMERCE in such a manner as to place it at a maximum of 100% ad valorem.
disadvantage compared with the commerce of another  The power to increase or decrease shall include
foreign country. the authority to MODIFY THE FORM OF DUTY.
b. Establish import quota as may be necessary
V. SAFEGUARD MEASURES c. Ban imports of any commodity as may be necessary
 Safeguard measures can be imposed when a product is d. Impose an additional dity on all imports not
being imported into the Philippines in INCREASED exceeding 10% ad valorem
QUANTITIES and is causing or is threatening to cause
serious injury to the domestic industry.  The President may do this in the interest of (1)
National Security, (2) National Economy, and (3)
 Conditions for the Application of General Safeguard General Welfare, and upon the recommendation of
Measures: The SECRETARY shall apply a general safeguard NEDA.
measure upon a positive final determination of the
Commission that a product is being imported into the  When is the COMMISSION required to do an
country in increased quantities, whether absolute or INVESTIGATION and conduct PUBLIC HEARING (prior to
relative to the domestic production, as to be a substantial the submission of recommendation by NEDA)?
cause of serious injury or threat thereof to the domestic 1. Increase existing rates of import duty
industry; however, in the case of non-agricultural 2. Reduction existing rates of import duty
products, the Secretary shall first establish that the 3. Removal of existing rates of import duty
application of such safeguard measures will be in the 4. Establishment of import quotas
public interest. 5. Ban on imports of any commodity

DUMPIN COUNTE MARKING DISCRIMI- NOTE: No hearing and investigation is required in the
G DUTY R- DUTY NATORY imposition of additional duty not exceeding 10% ad
VAILING DUTY valorem.
DUTY
NATURE Imposed Imposed Imposed Imposed  In the PUBLIC HEARINGS, the interested parties shall
upon upon upon those upon be afforded reasonable opportunity to be present, to
foreign foreign not properly goods produce evidence, and to be heard. The Commission
goods goods marked as coming shall also hear the views and recommendations of
with enjoying to place of from any government office, agency, or instrumentality.
value subsidy, origin of the countries  The Commission shall submit its findings and
lower thus goods that recommendations to the NEDA within 30 days after
than allowing discrimina the public hearings’ termination.
their them to te against
FMV to sell at Philippine  Any order issued by the President pursuant to the
the lower products provisions of this section shall take effect 30 DAYS AFTER
detrimen prices to PROMULGATION, except in the imposition of additional
t of local the duty not exceeding 10% ad valorem which shall take
products detrimen effect at the PRESIDENT’S DISCRETION.
t of local
products  This power delegated to the President shall be exercised
similarly only when CONGRESS IS NOT IN SESSION.
situated
AMOUNT Differenc Equivalen 5% ad Any  The power herein delegated may be WITHDRAWN or
OR RATE e t to the valorem of amount TERMINATED by the CONGRESS through a JOINT
between bounty, articles not RESOLUTION (HR and SENATE).
actual subsidy exceeding
price and or 100% ad
the subventi valorem of BEGINNING AND ENDING OF IMPORTATION
normal on the
value of subject When does IMPORTATION BEGIN?
the articles  Importation begins when the carrying vessel or aircraft
article enters the Philippine territory with the intention to unload
IMPOSIN Special Secretary Commission President therein (Sec. 103).
G committ of er of of PH  The imported goods are deemed “entered” when the
AUTHORI ee on Finance customs goods declaration is ELECTRONICALLY LODGED with the
TY Anti customs office.
Dumping

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 If there is no intention to unload, as when the carrying  Sec. 401 - Unless otherwise provided for in this Act, ALL
vessel or aircraft only had a stopover in the Philippines, IMPORTED GOODS shall be subject to the LODGEMENT of
there is no importation. a GOODS DECLARATION.
 A goods declaration may be for: CCACC
When is IMPORTATION DEEMED TERMINATED?  Consumption
 If goods are subject to Duties, Taxes and other Charges:  Customs bonded warehousing
DL  Admission
a. When the DTC have been paid or secured to be paid,  Conditional importation or
at the port of entry; AND  Customs transit.
b. Legal permit for withdrawal has been granted.
 Lodgment - refers to the registration of a goods
 If goods are exempt from Duties, Taxes and other declaration with the Bureau.
Charges - when the goods have left the Bureau’s  Goods Declaration - refers to a statement made in the
jurisdiction. manner prescribed by the Bureau and other appropriate
agencies, by which the persons concerned indicate: PP
 The importance of knowing what importation is lies in the 1. The Procedure to be observed in the application for
Doctrine of Primary Jurisdiction. the entry or admission of imported goods; and
 From the time importation begins until its 2. The Particulars of which the customs administration
termination, the Bureau of Customs has EXCLUSIVE shall require.
JURISDICTION, to the exclusion of everyone else.
RESPONSIBILITIES OF DECLARANT: APS
MANIFEST REQUIRED of VESSEL FROM FOREIGN PORT 1. Accurancy of the goods declaration
 Every vessel from a foreign port must have on board a 2. Payment of all duties, taxes and other charges due on the
COMPLETE MANIFEST of ALL ITS CARGOES. imported goods.
3. Sign the goods declaration.
 All cargoes intended to be landed at a port in the
Philippines must be DESCRIBED IN SEPARATE MANIFESTS  The licensed customs broker shall likewise be responsible
FOR EACH PORT OF CALL. for the accuracy of the goods declaration, but shall not be
 Each manifest shall include the port of departure responsible for the payment of duties, taxes and other
and the port of delivery with the: MNQDN charges due on the imported goods. He must also sign the
 Marks goods declaration.
 Numbers
 Quantity  Penalties for errors in goods declaration: Bureau shall
 Description of the packages and NOT IMPOSE substantial penalties for errors when such
 Names of the consignees. errors are INADVERTENT and there was NO FRAUDULENT
INTENT OR GROSS NEGLIGENCE in its commission:
 Every vessel from a foreign port must have on board Provided, that in order to discourage repetition of errors,
complete manifests of PASSENGERS AND BAGGAGE, the a penalty may be imposed, but shall not be excessive.
the prescribed form, setting forth the destination and all
particulars required by immigration laws.  When the declarant does not have all the information
required to make the goods declaration, a PROVSIONAL
 If the vessel does not carry cargo or passengers, the OR INCOMPLETE GOODS DECLARATION shall, for certain
manifest must show that no cargo or passenger is carried cases and for reasons deemed valid by the Bureau, be
from the port of departure to the port of destination in allowed to be lodged: Provided that: CU
the Philippines.  it contains the particulars deemed necessary by the
Bureau for the acceptance of the entry filed and
 Cargo manifests shall in no case be changed or altered  the declarant undertakes to complete it within 45
after entry of vessel, except by means of an days from the filing of the provisional goods
AMENDMENT UNDER OATH by the MASTER, CONSIGNEE declaration in accordance with section 403 of CMTA.
or AGENT thereof, which shall be attached to the original
manifest:  No entry of imported goods shall be allowed unless the
 Provided, that after the invoice and/or goods goods declaration has been lodged with the Bureau.
declaration covering an importation have been  Goods declaration shall be submitted electronically
received and recorded in the office of the appraiser, pursuant to the Electronic Commerce Act. Such
no amendment of the manifest shall be allowed, declarations, when printed and certified by a
except when it is obvious that a clerical error or any competent customs officer as a faithful reproduction
other discrepancy has been committed in the of the electronic submission, shall be considered as
preparation of the manifest, without fraudulent actionable documents for purposes of prosecuting a
intent, the discovery of which would not have been declarant if the declarations are found to be
made until after examination of the importation has fraudulent.
been completed.
OWNER OF IMPORTED GOODS
 Manifest and its copies must be accompanied by a  All goods imported into the Philippines shall be deemed to
translation in ENGLISH, if originally written in another be the property of the CONSIGNEE or the HOLDER OF THE
language. BILL OF LADING, airway bill or other equivalent transport
document if duly endorsed by the consignee therein, or, if
IMPORT ENTRY consigned to order, duly endorsed by the consignor. The
underwriters of abandoned goods and the salvor of

Page 5 of 10
 goods saved from wreck at sea, coast, or in any area of e. Knowingly causes the importation or
the Philippines, may be regarded as the consignees. transportation or storage of imported goods
referred to above, or the filing of refund or
 Liability of Importer for Duties and Taxes - Unless drawback claim.
relieved by laws or regulations, the liability for duties, 2. An Agent of a party described in par(1); or
taxes, fees, and other charges attached to importation 3. A person whose Activities require the filing of a goods
constitutes a personal debt due and demandable against declaration.
the IMPORTER in favor of the government, and shall be
discharged only upon payment of duties, taxes, fees and  A person ordering imported goods from a local importer
other charges. or supplier in a DOMESTIC TRANSACTION shall be exempted
 It also constitutes a lien on the imported goods from the requirements imposed by this section unless: TCP
which may be enforced while such goods are under 1. Terms and conditions of the importation are
customs’ custody. controlled by the person placing the order;
2. Circumstances and nature of the relationship between
LIQUIDATION OF DUTIES the person placing the order and the importer or
supplier are such that the former may be considered
 Ascertainment of the duties that have to be paid on the as the beneficial or true owner of the imported goods;
imported goods. or
3. Person placing the order had Prior knowledge that
Sec. 424. Duty of Customs Officer Tasked to Assess Imported they will be used in the manufacture and production
Goods. - For purposes of assessing duties and taxes on of the imported goods.
imported goods, the customs officer shall classify, value, and
determine the duties and taxes to be paid. He shall prepare and  FAILURE TO KEEP THE RECORDS AS REQUIRED by this Act
submit an ASSESSMENT REPORT. shall constitute a WAIVER OF THIS RIGHT TO CONTEST THE
RESULTS OF THE AUDIT based on records kept by the Bureau.
Sec. 429. FINAL ASSESSMENT. - Assessment shall be deemed
final 15 DAYS AFTER RECEIPT of the NOTICE OF ASSESSMENT  Importers/customs brokers shall allow any customs
by the IMPORTER or CONSIGNEE. officer authorized by the BOC to ENTER DURING OFFICE
HOURS into the offices to conduct audit examination,
Sec. 430. PERIOD OF LIMITATION. - In the absence of fraud and inspection, verification and/or investigation.
when the goods have been finally assessed and released, the
assessment shall be conclusive upon all the parties 3 YEARS POST CLEARANCE AUDIT
from the date of final payment of duties and taxes, or upon  The Bureau has 3 YEARS from the date of final payment
completion of the post clearance audit. of duties and taxes or customs clearance to conduct an audit
examination of records pertaining to any goods declaration.
o One year after final liquidation, the matter can  Purpose: to ascertain the correctness of the goods
no longer be opened except only in 2 cases: declaration and to determine the liability of the importer for
o Protest is made meanwhile and duties, taxes and other charges, including any fine or penalty,
o Taxpayer is guilty of fraud. to ensure compliance with the CMTA.

Sec. 431. RELEASE OF GOODS AFTER PAYMENT OF DUTIES ACCRUAL AND PAYMENT OF TAXES AND DUTIES
AND TAXES. - Goods declared shall be released when duties  GENERAL RULE:
and taxes and other lawful charges have been paid or secured o Section 104. When Duty and Tax are Due on
and all the pertinent laws, rules and regulations have been Imported Goods. – Except as otherwise provided for in
complied with. this Act or in other laws, all goods, when imported
into the Philippines, shall be SUBJECT TO DUTY UPON
IMPORTATION, including goods previously exported
KEEPING OF RECORDS from the Philippines.
 All IMPORTERS are required to keep at their principal o Unpaid duties, taxes and other charges shall incur
place of business ALL RECORDS PERTAINING TO THE LEGAL INTEREST of 20% PER ANNUM computed from
ORDINARY COURSE OF BUSINESS and to ANY ACTIVITY OR the date of final assessment when payment becomes
INFORMATION CONTAINED IN THE RECORDS. due and demandable.
o This needs to be done for 3 YEARS from the date of o The Legal interest shall likewise accrue on any fine or
final payment of duties and taxes or customs penalty imposed.
clearance. o Upon payment of DTC, the Bureau shall issue the
NECESSARY RECEIPT or DOCUMENT as proof of
 For purposes of POST-CLEARANCE AUDIT, the term payment.
IMPORTER shall include the following: ICOD-PAA
1. Importer-of-record or consignee, owner or declarant, o Section 406. Importations by the GOVERNMENT. –
or a party who: WIFT-K Except those provided for in Section 800 of this Act,
a. Withdraws imported goods into the ALL IMPORTATIONS by the GOVERNMENT for ITS
Philippines customs territory for consumption OWN USE or THAT OF ITS SUBORDINATE BRANCHES
or warehousing; OR INSTRUMENTALITIES, or corporations, agencies or
b. Imports goods into the Philippines; instrumentalities owned and controlled by the
c. Files a claim for refund or drawback; or government, shall be SUBJECT TO THE DUTIES, TAXES,
d. Transports or stores such goods carried or FEES and OTHER CHARGES under this Act.
held under security; or
 EXCEPTIONS: DCR
Page 6 of 10
 1. De minimis importations years and have not availed of this
2. Conditionally-free importations privilege within 6 months prior to
3. Relief consignment returning resident’s arrival.

Any amount in excess of the above-stated

DE MINIMIS IMPORTATIONS threshold shall be subject to the
 NO duties and taxes shall be collected on goods with an corresponding duties and taxes under the
FOB or FCA value of P10,000 or below. CMTA.

CONDITIONALLY-FREE IMPORTATIONS o In addition to the privileges granted under the

 These importations are exempt from payment of import immediately preceding paragraph, RETURNING OFWs
duties, taxes and other charges provided they comply with the shall have the privilege to bring in, tax and duty free,
formalities and regulations promulgated by the Commissioner HOME APPLIANCES and OTHER DURABLES, limited to
of Customs. ONE OF EVERY KIND, ONCE IN A GIVEN CALENDAR
o In other words, these importations are free from YEAR accompanying them on their return, or arriving
duties, taxes and other charges provided that certain within a reasonable time which, barring unforeseen
conditions are first met. and fortuitous events, in no case shall exceed 60 days
o If the articles imported for free are used, sold, after every returning OFW’s return upon presentation
bartered or hired for purposes other than that which of their original passport at the port of entry:
they were intended for, without prior payment of the Provided, that any amount in excess of FCA value of
duty, tax, or other charges which would have been P150,000 for persona and household effects or of the
due and payable at the time of entry, then the article number of duty-free appliances, shall be subject to the
will be FORFEITED by the Government, and the corresponding taxes and duties.
importation shall constitute a FRAUDULENT
PRACTICE against customs revenue. o Requisites of Exemption of BALIKBAYAN BOXES,
brought in or sent to their families in the Philippines
 The PRESIDENT may suspend, disallow, or completely by Residents of the Philippines, OFWs, or other
withdraw, in whole or in part, any of the conditionally-free Filipinos while residing abroad or upon their return to
importation. the Philippines: RP-ABCV
1. Must be from Residents of PH, OFWs, or other
 Examples: Filipinos while residing abroad or upon their
o Personal household effects including appliances and return to the PH;
other goods of luxury which were (1) formally 2. Contains Personal and household effects only;
declared and listed before departure and (2) 3. Can be Availed of up to 3 times in a calendar year
identified under oath before the District Collector only;
when exported from the Philippines by such 4. Not for Barter, sale or for hire;
residents upon their departure therefrom or during 5. Not in Commercial quantities; and
their stay abroad. 6. Value shall not exceed P150,000.
o Personal and household effects (1) necessary,
appropriate and normally used for their comfort and GOODS DECLARATION
convenience during their stay abroad, (2)  Goods Declaration - refers to a statement made in the
accompanying them on their return, or arriving within manner prescribed by the Bureau and other appropriate
a reasonable time which, barring unforeseen and agencies, by which the persons concerned indicate: PP
fortuitous events, in no case shall exceed 60 days after 1. The Procedure to be observed in the application for
the owner’s return. the entry or admission of imported goods; and
2. The Particulars of which the customs administration
For purposes of this section, RETURNING RESIDENTS shall require.
shall refer to nationals who have stayed in a foreign
country for a period of AT LEAST 6 MONTHS. FORMAL ENTRY vs INFORMAL ENTRY PROCESS
Returning residents shall have tax and duty exemption  All goods declaration FOR CONSUMPTION shall be cleared
on personal and household items under the following through a FORMAL ENTRY PROCESS, except for the following
conditions: CBL goods which shall be cleared through an INFORMAL ENTRY
1. Not in Commercial quantities; PROCESS: LP
2. Not intended for Barter, sale or for hire; and 1. Goods of a commercial nature with FOB or FCA value
3. Limited to the FCA or FOB value of: of Less than P50,000;
a. P350,000 for those who have stayed in a 2. Personal and household effects or goods, not in
foreign country for at least 10 years and commercial quantities, imported in a passenger’s
have not availed of this privilege within baggage or mail.
10 years prior to returning resident’s
arrival.  All importations entered thru a FORMAL ENTRY PROCESS
b. P250,000 for those who have stayed in a shall be covered by: LVC
foreign country for a period of at least 5 1. A Letter of credit; or
years but not more than 10 years and 2. Any Verifiable commercial document evidencing
have not availed of this privilege within 5 payment; or
years prior to returning resident’s arrival; 3. By any Commercial document indicating the
or commercial value of the goods, in cases where there is
c. P150,000 for those who have stayed in a no sale for export.
foreign country for a period of less than 5

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FILING OF GOODS DECLARATION case of classification dispute, or (2) the final
 Sec. 106. DECLARANT. – A declarant may be a CONSIGNEE resolution of the protest case involving
or a PERSON who has the RIGHT TO DISPOSE of the goods. The valuation, rules of origin, and other customs
declarant shall lodge a goods declaration with the Bureau and issues.
may be: ICE-P 2. In Provisional Goods declaration.
1. The Importer, being the holder of the bill of lading; pr
2. The Exporter, being the owner of the goods to be o In both cases, the goods can be released upon posting
shipped out; or of proper security.
3. A Customs broker acting under the authority of the o These become final upon final readjustment.
importer or from the holder of the bill; or
4. A Person duly empowered to act as agent or attorney-  FINAL ASSESSMENT – Assessment shall be deemed final
in-fact for each holder. 15 days after receipt of the notice of assessment by the
In case the consignee or the person who has the right to importer or consignee.
dispose of the goods is a JURIDICAL PERSON, it may
authorize a responsible officer of the company to sign the  PERIOD OF LIMITATION – (1) In the absence of fraud and
goods declaration as declarant on its behalf. (2) when the goods have been finally assessed and released,
the assessment shall be CONCLUSIVE upon ALL PARTIES 3
 PERIOD OF FILING OF GOODS DECLARATION – Goods YEARS from the DATE OF FINAL PAYMENT of duties and taxes,
declaration must be lodged within 15 days from the date of or UPON COMPLETION OF THE POST CLEARANCE AUDIT.
discharge of the last package from the vessel or aircraft.
 Generally, goods are released when: DL
o The period to file the goods declaration may, upon o DTC have been paid or secured; and
request, be extended on valid grounds for another 15 o Laws, rules and regulations have been complied with.
days: Provided, that the request is made before the
expiration of the original period within which to file
the goods declaration: Provided, however, That the RELIEF CONSIGNMENT
period of the lodgment of the goods declaration may  Refers to goods donated or leased to the GOVERNMENT
be adjusted by the Commissioner. and ACCREDITED PRIVATE ENTITIES for free distribution to or
use of victims of calamities.
 AMENDMENT OF GOODS DECLARATION – The Bureau o Upon declaration of a state of calamity, clearance of
shall, for VALID REASON and UNDER THE TERMS AND relief consignment shall be a matter of priority and
CONDITIONS PROVIDED BY REGULATION, permit the declarant subject to a simplified customs procedure.
to amend the goods declaration that has already been lodged:
Provided, That the REQUEST TO AMEND the goods declaration,  Requisites to be exempt from duties, taxes and other
together with the intended amendments, must be RECEIVED charges: SUS
PRIOR TO FINAL ASSESSMENT OR EXAMINATION OF THE 1. Imported during a State of calamity;
GOODS. 2. Intended for a Specific calamity area; and
3. For the Use of calamity victims therein.
 NOTE: Lodgement and clearance PRIOR to the arrival of
the goods may be allowed by the Bureau. This is called MISDECLARATION, MISCLASSIFICATION and
ADVANCE LODGEMENT AND CLEARANCE. UNDERVALUATION in GOODS DECLARATION
 MISDECLARATION – occurs when there is difference in the
PROVISIONAL GOODS DECLARATION QQDWM Quantity, Quality, Description, Weight or
 WHEN FILED: A provisional goods declaration can be filed Measurement of the goods stated in the goods declaration
if the declarant does not have all the information required to and the goods itself, thereby resulting to a discrepancy in
complete the goods declaration. duty and tax to be paid between what is legally
determined upon assessment and what is declared.
 CONDITIONS:
1. It must Substantially contain information required by  MISCLASSIFICATION – occurs IWT (1) when there is
the Bureau; and Wrong or Insufficient description of the goods or (2) when
2. An Undertaking by the declarant to complete the there is use of a wrong Tariff heading, thereby resulting to a
information or submit the supporting documents discrepancy in duty and tax to be paid between what is legally
within 45 days from the filing of the provisional goods determined upon assessment and what is declared.
declaration.
(period may be extended for another 45 days for valid o Misclassification and Misdeclaration shall be subject
reasons) to a SURCHARGE equivalent to 250% of the duty and
tax due.
 Goods under a provisional goods declaration may be o No surcharge shall be imposed when: 10%RT
released upon posting of any required SECURITY equivalent to  Discrepancy in duty is less than 10%; or
the amount ascertained to be the applicable duties and taxes.  There is Rejection of declared tariff heading in
a formal customs dispute settlement process
TENTATIVE ASSESSEMENTS involving difficult or highly technical question
 There are TENTATIVE ASSESSMENTS in the following of tariff classification; or
cases: DP  Tariff classification declaration relied on an
1. When the duties and taxes initially assessed are official government ruling.
Disputed; or
o The assessment shall be completed upon final  UNDERVALUATION – occurs when:
readjustment based on (1) the tariff ruling in

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 o The declared value fails to disclose in full the price to have had POSSESSION of the goods in question,
actually paid or payable or any dutiable adjustment to POSSESSION shall be deemed SUFFICIENT EVIDENCE TO
the price actually paid or payable; or AUTHORIZE CONVICTION unless the defendant shall explain
o An incorrect valuation method is used or the the possession to the satisfaction of the court: Provided, that
valuation rules are improperly observed; each act of unlawful importation or exportation shall be
Resulting in a discrepancy in duty and tax to be paid deemed as a SEPARATE OFFENSE:
between what is legally determined as the correct value o Provided, however, that PAYMENT of the tax due
against the declared value. AFTER APPREHENSION shall NOT CONSTITUTE A
VALID DEFENSE in any prosecution under this section:
 A DISCREPANCY of more than 30% is PRIMA FACIE o Provided, further, that outright smuggling shall also
EVIDENCE OF FRAUD. be punishable under this Section;
 When the misdeclaration, misclassification, or o Provided, finally, that the rights and privileges
undervaluation is intentional or fraudulent, a SURCHARGE OF provided in this Act for the importers, consignees,
500% of the duty and tax due shall be imposed, and the goods exporters, service providers, third parties and other
shall be SEIZED. third parties who committed this offense shall be
o This, however, is without prejudice to the application revoked.
of fines or penalties provided under Section 1401 of
CMTA against the importer and other person or
persons who willfully participated in the fraudulent OTHER FRAUDULENT PRACTICES
act.
o Section 1401 provides penalties for Unlawful I. FAILURE OR REFUSAL OF PARTY TO GIVE EVIDENCE OR
Importation and Exportation. SUBMIT DOCUMENTS FOR ASSESSMENT (1402)
 When owner, importer or consignee of imported
o Example: When a false or altered document is goods, or their agent, fails or refuses, upon lawful
submitted or when false statements or information demand in writing by customs officer to: ALSAP
are knowingly made. o Appear
o Lawfully depose
 Example: Mr. Z made an importation which he declared at o Submit to examination
the BOC as “Used Truck Replacement Parts.” Upon o Answer any material question
investigation, the container van contained 15 units of Porsche o Produce records, accounts or invoices in
and Ferrari cars. Characterize Mr. Z’s action. possession pertaining to the value, classification
o Mr. Z committed misdeclaration as the declaration and or disposition of the goods in question and
the actual contents of the container vans are obviously deemed material in assessing the same
different. Thus, these will be subject to forfeiture.
(Bombay Dept Store v. Commissioner of Customs, GR  Penalty: District collector shall assess a surcharge of
L-20489) 20% on the dutiable value of the goods which is the
subject of the importation
UNLAWFUL IMPORTATION or EXPORTATION
 SMUGGLING – refers to: FAF II. FAILURE TO DECLARE BAGGAGE (1404)
a. The Fraudulent act of importing any goods into the  When dutiable goods are not declared by any person
Philippines; or arriving within the Philippines
b. The act of Assisting in buying, concealing, disposing,  Consequence: Goods shall be seized.
receiving, selling, or transporting such goods bcd-rst,  Person may obtain release of the goods, if not
with full knowledge that the same has been imported contrary to any law, upon payment of
fraudulently imported; or surcharge equivalent to 30% of landed cost of the
c. The Fraudulent exportation of goods. goods, in addition to DTC due.
Goods referred to under this definition shall be known as  Nothing in this section shall preclude the filing of
SMUGGLED GOODS. criminal action against offender.

 TECHNICAL SMUGGLING – refers to the act of importing III. VESSEL DEPARTING BEFORE UNDERGOING CUSTOMS
goods into the country by means of fraudulent, falsified or FORMALITIES (1405)
erroneous FFE declaration of the goods to its nature, kind,  Any vessel, seacraft or aircraft arriving within the limits
quality, quantity or weight NK-QQW, for the purpose of of a Customs District from a foreign port which
reducing or avoiding payment of prescribed taxes , duties and departs before undergoing customs formalities,
other charges. without being compelled to do so by:
o Stress of weather
 OUTRIGHT SMUGGLING – refers to an act of importing o Pursuit or duress of enemies or
goods into the country: o Other necessity
a. Without complete customs-prescribed importation
documents CCID; or  Penalty: Fine not less than P100,000 but not more
b. Without being cleared by customs or other regulatory than P300,000.
government agencies;
For the purpose of prescribed taxes, duties and other IV. OBSTRUCTION TO BOARDING OFFICER
government charges.  If the Master or Pilot-in-command or any Member of
the complement of any vessel or aircraft arriving at
the Philippine port obstructs or hinders any officer
 When upon trial for violation of this section (Sec. 1401, from lawfully going on board such vessel or aircraft
Unlawful Importation or Exportation), the defendant is shown for the purpose of enforcing this Act; or
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  Intentionally causes any officer to be so obstructed or benefits due from service in the government, including
hindered separation and retirement benefits, shall be forfeited.
 Penalty: Vessel or aircraft shall be liable to a fine of
not less than P100,000 but not more than P300,000. IX. REMOVING OF GOODS FROM CUSTOMS CUSTODY (1424)
 Committed by one who:
V. UNLAWFUL BOARDING OR LEAVING OF VESSEL OR o enters any warehouse, or any vehicle loaded
AIRCRAFT (1407) with or containing merchandise with intent
 Committed when, upon arrival at the Philippine port, to unlawfully remove therefrom any
any master of a vessel or pilot-in-command of an merchandise or baggage in such vessel,
aircraft engaged in foreign trade, permits any person vehicle or warehouse or otherwise in
to BOARD or LEAVE the vessel or aircraft without customs custody or control; or
permission of the customs officer in charge. o who receives or transports any merchandise
 Penalty: The OWNER OR OPERATOR of the vessel or or baggage unlawfully removed from any
aircraft shall be liable for fine of not less than such vessel, vehicle or warehouse; or
P100,000 but not more than P300,000. o aids or abets such removal.

VI. UNLOADING OF CARGO BEFORE ARRIVAL AT PORT OF  Penalty: Those provided in Sec. 1401
ENTRY (1408)
 Committed when, upon arrival within the limits of any X. FAILURE TO PAY DUTIES, TAXES AND OTHER CHARGES
Customs District of PH of any vessel or aircraft  Offender fails to pay duties taxes and other charges
engaged in foreign trade, the master or pilot-in- within 15 days from date of final assessment
command permits any part of the cargo to be  Penalty: Surcharge of 10% of the total assessed
unloaded before arrival at the port of entry, and amount or balance. Surcharge shall be increased to
WITHOUT AUTHORITY of the proper customs officer 25% if the delinquency lasts for more than 1 year.
 Penalty: OWNER, OPERATOR or AGENT of such vessel
or aircraft shall be held liable for a fine of not less than XI. FAILURE TO KEEP IMPORTATION RECORDS AND FULL
P500,000 but not more than P2M. ACCESS TO CUSTOMS OFFICERS (1427)
o However, no fine shall accrue upon  Committed by any person who fails to keep all the
SATISFACTORY PROOF to the proper District records of importations or books of accounts, business
Collector that the unloading was RENDERED and computer systems and all customs commercial
NECESSARY by: data in the manner prescribed under this Act.
 Stress of weather  Committed by importers and brokers who deny an
 Accident or authorized customs officer full and free access to
 Other necessity such records, books of accounts, business and
 Fine imposed herein shall not be without prejudice to computer systems, and all customs commercial data,
the application of fines or penalties provided under without prejudice to the imposition of the
Sec 1401. administrative sanctions by the Bureau against
contumacious importers, including the authority to
VII. BRINGING OF UNMANIFESTED ARMS, EXPLOSIVES OR hold delivery or release of their imported goods.
WAR EQUIPMENT  Penalty: Imprisonment of not less than 3 years and 1
 Committed when a vessel or aircraft at a port in the day, but not more than 6 years and/or fine of P1M.
Philippines is bearing cargo consisting of firearms,
gunpower, cartridges, dynamite, or any other XII. CONCEALMENT OR DESTRUCTION OF EVIDENCE OF
explosives, munitions or equipment of war NOT FRAUD (1428)
CONTAINED IN THE MANIFEST OF THE VESSEL OR  Committed by any person who:
AIRCRAFT, or which are NOT CONCEALED ON BOARD. 1. willfully conceals or destroys any invoice, book,
 Penalty: OWNER, OPERATOR, or AGENT of such or document relating to any goods liable to duty
vessel or aircraft shall be liable for a fine of not less after an inspection thereof has been demanded
than P500,000 but not more than P1M. by the District Collector or
2. at any time conceals or destroys any such
VIII. FAILURE TO REPORT FRAUD (1416) invoice, book, or document for the purpose
 Happens when a master, pilot-in-command or other suppressing any evidence of fraud therein
officer, owner or agent of any vessel or aircraft trading contained.
with or within the Philippines, who HAS KNOWLEDGE  Penalty: Imprisonment not less than 6 months and 1
of the COMMISSION OF FRAUD that shall result in the day but not more than 6 years and fine of not less than
LOSS or DIMINUTION OF CUSTOMS REVENUE, fails to P300,000 but not more than P1M.
report ALL INFORMATION relative thereto to the
DISTRICT COLLECTOR.
 Penalty: Imprisonment of not less than 6 months and
1 day but not more than 1 year, and fine of not less
than P100,000 but not more than P300,000.
 If the offender is a FOREIGNER, offender shall be
DEPORTED after serving the sentence.
 If the offender is a PUBLIC OFFICER OR EMPLOYEE,
offender shall suffer additional penalty of PERPETUAL
DISQUALIFICATION TO HOLD PUBLIC OFFICE, TO
VOTE and TO PARTICIPATE IN ANY ELECTION. All

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