book i tariff

7/31/2019 Book i Tariff

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BOOK ITARIFF LAW

TITLE IIMPORT TARIFF

Section 101. Imported Articles Subject to Duty. All articles, when imported from any foreign country

into the Philippines, shall be subject to duty uponeach importation, even though previously exportedfrom the Philippines, except as otherwisespecifically provided for in this Code or in otherlaws.

Sec. 102. Prohibited Importations. Theimportation into the Philippines of the followingarticles is prohibited:a. Dynamite, gunpowder, ammunitions and otherexplosives, firearm and weapons of war, anddetached parts thereof, except when authorized bylaw.

b. Written or printed article in any form containingany matter advocating or inciting treason, rebellion,insurrection or sedition against the Government ofthe Philippines, of forcible resistance to any law ofthe Philippines, or containing any threat to take thelife of or inflict bodily harm upon any person in thePhilippines.

c. Written or printed articles, photographs,engravings, lithographs, objects, paintings, drawingsor other representation of an obscene or immoralcharacter.

d. Articles, instruments, drugs and substancesdesigned, intended or adapted for preventinghuman conception or producing unlawful abortion,or any printed matter which advertises or describesor gives directly or indirectly information where,how or by whom human conception is prevented orunlawful abortion produced.

e. Roulette wheels, gambling outfits, loaded dice,marked cards, machines, apparatus or mechanicaldevices used in gambling, or in the distribution ofmoney, cigars, cigarettes or other articles whensuch distribution is dependent upon chance,

including jackpot and pinball machines or similarcontrivances.

f. Lottery and sweepstakes tickets except thoseauthorized by the Philippine Government,advertisements thereof and lists of drawingstherein.

g. Any article manufactured in whole or in part ofgold silver or other precious metal, or alloysthereof, the stamps brands or marks of which do not

indicate the actual fineness or quality of said metalsor alloys.

h. Any adulterated or misbranded article of food orany adulterated or misbranded drug in violation ofthe provisions of the"Food and Drugs Act."

i. Marihuana, opium poppies, coca leaves, or any

other narcotics or synthetic drugs which are or mayhereafter be declared habit forming by thePresident of the Philippines, any compound,manufactured salt, derivative, or preparationthereof, except when imported by the Governmentof the Philippines or any person duly authorized bythe Collector of Internal Revenue, for medicinalpurposes only.

j. Opium pipes and parts thereof, of whatevermaterial.

k. All other articles the importation of which isprohibited by law.

Sec. 103.Abbreviations. The followingabbreviations in this Code shall represent the termsindicated:ad. val. For ad valoreme.g. For exempli gratia, meaning "for example"i.e. For id est, meaning "that is"hd. For headkgs. For kilogramsl. For literg.w. For gross weightl.w. For legal weightn.w. For net weight

Sec. 104. Rates of Import Duty. There shall belevied, collected and paid upon all imported articlesthe following rates of duty, except as otherwisespecifically provided for in this Code.

(This portion containing the voluminous descriptionof rates of import duties, has been deleted for theconvenience of readers who are more interested onthe substantive provisions of the Code)

Sec. 105. Conditionally Free Importations. Thefollowing articles shall be exempt from the payment

of import duties upon compliance with theformalities prescribed in, or with the regulationswhich shall be promulgated by the Commissioner ofCustoms with the approval of the department head:a. Animals and plants for scientific, experimental,propagation, botanical, breeding, zoological andnational defense purposes: Provided,That no livetrees, shoots, plants and moss, and bulbs, tubersand seeds for propagation purposes may beimported under this section, except by order of theGovernment of the Philippines or other duly
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authorized institutions: Provided, further,That thefree entry of animals for breeding purposes shall berestricted to animals of a recognized breed, dulyregistered in the book of record established for thatbreed: And Provided, finally,That certificate ofsuch record, and pedigree of such animal dulyauthenticated by the proper custodian of such bookof record, shall be produced and submitted to the

Collector of Customs, together with affidavit of theowner or importer, that such animal is the identicalanimal described in said certificate of record andpedigree.

b. Aquatic products (e.g., fish, crustaceans,mollusks, marine animals, seaweed, fish oil, roe),including preparations or manufactures thereof,caught or gathered by vessels of Philippine registry:Provided, That they are imported in such vessels orin crafts attached thereto: And Provided, further,That they have not been landed in any foreignterritory or, if so landed, they have been landedsolely for transshipment without having beenadvanced in condition.

c. Samples of the kind, in such quantity and of suchdimensions or construction as to render themunsalable or of no appreciable commercial value,models not adapted for practical use and samples ofmedicine properly marked "physicians' samples notfor sale".

Commercial samples, except those that are notreadily and easily identifiable (e.g., precious andsemi-precious stones, cut or uncut, and jewelry setwith precious or semi-precious stones), the value ofany single importation of which does not exceed tenthousand pesos, upon the giving of a bond in anamount equal to one and one-half times theascertained duties, taxes and other chargesthereon, conditioned for the exportation of saidsamples within six months from the date of theacceptance of the import entry, or in defaultthereof, the payment of the corresponding duties,taxes and other charges. If the value of any singleconsignment of such commercial samples exceedsten thousand pesos, the importer thereof may selectany portion of same not exceeding in value tenthousand pesos for entry under the provisions of this

subsection, and the excess of the consignment maybe entered in bond, or for consumption, as theimporter may elect.

d. Articles, including binnacles, propellers, and thelike, the character of which, as imported, preventstheir use for other purposes than the construction,equipment, or repair of vessels and aircraft, andlife-preservers and life buoys, related equipmentand parts and accessories thereof, which are

necessary for the take-off and landing and for thesafe navigation of vessels and aircraft.

e. Equipment for use in the salvage of vessels oraircraft, upon identification and the giving of a bondin an amount equal to one and one-half times theascertained duties, taxes and other chargesthereon, conditioned for the exportation thereof or

payment of the corresponding duties, taxes andother charges within six months from the date ofacceptance of the import entry: Provided, That theCollector of Customs may extend the time forexportation or payment of duties, taxes and othercharges for a term not exceeding six months fromthe expiration of the original period.

f . Cost of repairs made in foreign countries uponvessels or aircraft documented, registered orlicensed in the Philippines, upon proof satisfactoryto the Collector of Customs (1) that adequatefacilities for such repairs are not afforded in thePhilippines, or (2) that such vessels or aircraft,while in the regular course of her voyage or flightwas compelled by stress of weather or othercasualty to put into a foreign port to make suchrepairs in order to secure the safety seaworthinessor airworthiness of the vessel or aircraft to enableher to reach her port of destination.

g. Articles brought into the Philippines for repair,processing or reconditioning to be re-exported uponcompletion of the repair, processing orreconditioning: Provided, That the Collector ofCustoms may, in his discretion, require the giving ofa bond in an amount equal to one and one-halftimes the ascertained duties, taxes and othercharges thereon, conditioned for the exportationthereof or payment of the corresponding duties,taxes and other charges within six months from thedate of acceptance of the import entry.

h. Medals, badges, cups and other small articlesbestowed as trophies or prizes, or those received oraccepted as honorary distinctions.

i. Wearing apparel and household effects, includingthose articles provided for under subsections "j" and"k", and belonging to residents of the Philippines

returning from abroad, which were exported fromthe Philippines by such returning residents upontheir departure therefrom or during their absenceabroad, upon the identity of such articles beingestablished to the satisfaction of the Collector ofCustoms; personal and household effects broughtinto the Philippines by returning residents, theexport value of which does not exceed five hundredpesos, solely for personal or household use but notimported for the account of any other person norintended for barter, sale or hire: Provided, That


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such returning residents have not received thebenefit of any exemption hereunder within onehundred and eighty days from and after the date ofthe last exemption granted: And Provided, further,That in the event the total export value of theimported article or articles exceeds the amount offive hundred pesos, such article or articles shall besubject to duty only on the amount in excess of five

hundred pesos; articles of the same kind and classpurchased in foreign countries by residents of thePhilippines during their absence abroad andaccompanying them upon their return to thePhilippines, or arriving within a reasonable timewhich in no case shall exceed ninety (90) daysbefore or after the owner's return, upon proofsatisfactory to the Collector of Customs that samehave been in their use abroad for more than oneyear; articles in any single shipment consigned toany single person when the total export value ofsuch shipment does not exceed one hundred pesos:Provided,finally, That when the export valueexceeds the amount of one hundred pesos, only theamount in excess of one hundred pesos shall besubject to duty.

j. Wearing apparel, articles of personal adornment,toilet articles, portable tolls and instruments,theatrical costumes, and similar personal effects,accompanying travelers or tourists in their baggageor arriving within a reasonable time, in thediscretion of the Collector of Customs, before orafter the owners, in use of and necessary andappropriate for the wear or use of such personsaccording to their profession or position for theimmediate purposes of their journey and theirpresent comfort and convenience: Provided, Thatthis exemption shall not be held to apply to articlesintended for other persons or for barter, sale orhire: Provided, further,That the Collector ofCustoms may, in his discretion, require a bond in anamount equal to one and one-half times theascertained duties, taxes and other charges uponarticles classified under this subsection, conditionedfor the exportation thereof or payment of thecorresponding duties, taxes and other charges,within six months from the date of acceptance ofthe import entry: And Provided, finally, That theCollector of Customs may extend the time for

exportation or payment of duties, taxes and othercharges for a term not exceeding six months fromthe expiration of the original period.k. Vehicles, horses, harness, bed and table linen,table service, furniture, musical instruments andpersonal effects of like character, owned andimported by travelers or tourists for theirconvenience and comfort, upon identification andthe giving of a bond in an amount equal to one andone-half times the ascertained duties, taxes andother charges thereon, conditioned for the

exportation thereof or payment of thecorresponding duties, taxes and other chargeswithin six months from the date of acceptance ofthe import entry: Provided, That the Collector ofCustoms may extend the time for exportation orpayment of duties, taxes and other charges for aterm not exceeding six months from the expirationof the original period.

l. Professional instruments and implements, tools oftrade, occupation or employment, wearing apparel,domestic animals, and personal and householdeffects, including those of the kind and classprovided for under subsections "j" and "k" andbelonging to persons coming to settle in thePhilippines, in quantities and of the class suitable tothe profession, rank or position of the personimporting them, for their own use and not for barteror sale, accompanying such persons, or arrivingwithin a reasonable time, in the discretion of theCollector of Customs, before or after the arrival oftheir owners, upon the production of evidencesatisfactory to the Collector of Customs that suchpersons are actually coming to settle in thePhilippines, that the articles are brought from theirformer place of abode, that change of residence isbona fide, and that the privilege of free entry underthis subsection has never been previously granted tothem: Provided, That neither merchandise of anykind, nor machinery or other articles for use inmanufacture, shall be classified under thissubsection.

m. Animals, vehicles, portable theaters, circus andtheatrical equipment, including musicalinstruments, sceneries, panoramas, properties,saddlery, wax figures and similar objects for publicentertainment, and other articles for display inpublic expositions, or for exhibition or competitionfor prizes, and devices for projecting pictures andparts and appurtenances therefor, uponidentification and the giving of a bond in an amountequal to one and one-half times the ascertainedduties, taxes and other charges thereon,conditioned for exportation thereof or payment ofthe corresponding duties, taxes and other chargeswithin six months from the date of acceptance ofthe import entry:Provided, That the Collector of

Customs may extend the time for exportation orpayment of duties, taxes and other charges for aterm not exceeding six months from the expirationof the original period; and technical and scientificfilms when imported by technical, cultural andscientific institutions, and not to be exhibited forprofit: Provided,That if any of the said films isexhibited for profit, the proceeds therefrom shall besubject to confiscation, in addition to the penaltyprovided under section three thousand six hundredand ten of this Code.


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n. Articles (e.g., photographic, sound recording,electrical and other equipment, vehicles, animals,costumes, apparel, properties, supplies, unexposedmotion picture films) brought by foreign producersfor making or recording motion pictures on locationin the Philippines, upon identification and the givingof a bond in an amount equal to one and one-half

times the ascertained duties, taxes and othercharges thereon, conditioned for exportationthereof or payment of the corresponding duties,taxes and charges within six months from the dateof acceptance of the import entry. Unexposedmotion picture films allowed free entry under bondfor exportation falling within this subsection andsubsequently exposed, whether or not developed,may be reexported free of import duties, taxes andother charges.

Negative films, undeveloped, exposed outside thePhilippines by resident Filipino citizens or byproducing companies of Philippine registry wherethe principal actors and artists employed for theproduction are Filipinos, upon affidavit by theimporter that such exposed films are the same filmspreviously exported from the Philippines. As used inthis paragraph, the terms "actors"and "artists"include the persons working the photographiccamera or other photographic and sound recordingapparatus by means of which the film is made.

o. Costumes, regalia and other articles, includingoffice supplies and equipment, imported for theofficial use of members and attaches of foreignembassies, legations, consular officers and otherrepresentatives of foreign government: Provided,That the country which any such person representsaccords like privileges to corresponding officials ofthe Philippines.

Articles imported for the personal or family use ofthe members and attaches of foreign embassies,legations, consular officers and otherrepresentatives of foreign governments: Provided,That such privilege shall be accorded under specialagreements between the Philippines and thecountries which they represent: And Provided,further, That the privilege may be granted only

upon specific instructions of the Department ofFinance in each instance which will be issued onlyupon request of the Department of Foreign Affairs.

p. Regalia, gems, statuary, specimens or casts ofsculptures imported for the bona fide use and by theorder of any society incorporated or establishedsolely for religious, philosophical, educational,scientific or literary purposes, or for theencouragement of the fine arts, or for the use andby the order of any institution of learning, public

library, museum, orphan asylum or hospital, and notfor barter, sale or hire: Provided, That the term"regalia" shall be held to embrace only such insigniaof rank or office or emblems as may be worn uponthe person or borne in the hand during publicexercises or ceremonies of the society or institution,and shall not include articles of furniture orfixtures, or ordinary wearing apparel, nor personal

property of individuals.

q. Musical organs imported for the bona fide use andby the owner of any society incorporated orestablished for religious or educational purposes, or,expressly for presentation thereto.

r. Scientific apparatus, instruments and utensilsspecially imported for the bona fide use and by theorder of any society or institution incorporated orestablished solely for educational, scientific, orcharitable purposes, or for the encouragement ofthe fine arts, or for the bona fide use and by theorder of any institution of learning in thePhilippines, and not for barter, sale or hire.

s. Philosophical, historical, economic, scientific,technical and vocational books specially importedfor the bona fide use and by the order of any societyor institution, incorporated or established solely forphilosophical, educational, scientific, charitable orliterary purposes, or for the encouragement of thefine arts, or for the bona fideuse of and by theorder of any institution of learning in thePhilippines: Provided, That the provisions of thissubsection shall apply to books not exceeding twocopies of any one work when imported by anyindividual for his own use, and not for barter, saleor hire.

Bibles, missals, prayerbooks, koran, ahadith andother religious books of similar nature and extractstherefrom, hymnal and hymns for religious uses,specially prepared books, music and otherinstrumental aids for the deaf, mute or blind, andtextbooks prescribed for use in any school in thePhilippines: Provided, That complete bookspublished in parts in periodical form shall not beclassified herein.

t. Newsprint, whenever imported by or forpublishers for the exclusive use in the publication ofnewspapers.

u. Articles donated to public or private institutionsestablished solely for educational, scientific,cultural, charitable, health, relief, philanthropic orreligious purposes, for free distribution among, orexclusive use of, the needy.


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v. Food, clothing, house-building and sanitary-construction materials, and medical, surgical andother supplies for use in emergency relief work,when imported by or directly for the account of anyvictim, sufferer, refugee, survivor or any otherperson affected thereby, or by or for the account ofany relief organization, not operated for profit, fordistribution among the distressed individuals,

whenever the President shall, by proclamation,declare an emergency to exist by reason of a stateof war, pestilence, cholera, plague, famine,drought, typhoon, earthquake, fire, flood andsimilar conditions:Provided, That the importationfree of duty of articles described in this hereinsubsection shall continue only during the existenceof such emergency, or within such limits and subjectto such conditions as the President may, by hisproclamation, deem necessary to meet theemergency.

w. Philippine articles previously exported from thePhilippines and returned without having beenadvanced in value or improved in condition by anyprocess of manufacture or other means, and uponwhich no drawback or bounty has been allowed, andforeign articles when returned after having beenloaned and exported for use temporarily abroadsolely for exhibition, examination orexperimentation, for scientific or educationalpurposes, and foreign containers packed withexported Philippine articles and returned empty ifimported by or for the account of the person orinstitution who exported them from the Philippinesand not for sale, subject to identification: Provided,That any Philippine article falling under thissubsection upon which drawback or bounty has beenallowed shall, upon re-importation thereof, besubject to a duty under this subsection equal to theamount of such drawback or bounty.

x. Large containers (e.g., demijohns, cylinders,drums, casks and other similar receptacles of metal,glass or other material) which are, in the opinion ofthe Collector of Customs, of such a character as tobe readily identifiable may be delivered to theimporter thereof upon identification and the givingof a bond in an amount equal to one and one-halftimes the ascertained duties, taxes and other

charges thereon, conditioned for the exportationthereof on payment of the corresponding duties,taxes and other charges within one year from thedate of acceptance of the import entry.

y. Supplies or ship stores listed as such for the useof the vessel; supplies which are intended for thereasonable requirements of the vessel in her voyageoutside the Philippines, including such articlestransferred from a bonded warehouse in anycollection district to any vessel engaged in foreign

trade, for use or consumption of the passengers orits crew on board such vessel as sea stores; orarticles purchased abroad for sale on board a vesselas saloon stores or supplies: Provided, That anysurplus or excess of such ship, sea or saloon storesarriving from foreign ports shall be dutiableaccording to the corresponding heading orsubheading.

z. Articles and salvage from vessels recovered afterthe period of two years from the date of filing themarine protest or the time when the vessel waswrecked or abandoned as determined by theCollector of Customs, or such part of Philippinevessel or her equipment, wrecked or abandoned inPhilippine waters or elsewhere: Provided,Thatarticles and salvage recovered within the saidperiod of two years shall be dutiable according tothe corresponding heading or subheading.

aa. Articles of easy identification exported from thePhilippines for repairs abroad and subsequentlyreimported: Provided, That the cost of the repairsmade to any such article shall pay a rate of duty oftwenty-five per cent ad valorem.bb. Coffins or urns containing human remains, bonesor ashes, and all articles for ornamenting saidcoffins or urns and accompanying same; usedpersonal and household effects, not merchandise, ofdeceased persons, upon identification as such,satisfactory to the Collector of Customs.

Sec. 106. Drawbacks: a. On Fuel Used forPropulsion of Vessels. On all fuel imported intothe Philippines which is afterwards used for thepropulsion of vessels of Philippine registry engagedin trade with foreign countries, or in the coastwisetrade, a refund shall be allowed equal to the dutyimposed by law upon such fuel, less one per centthereof, which shall be paid under such rules andregulations as may be prescribed by theCommissioner of Customs with the approval of thedepartment head..b. On Articles Made from Imported Materials orSimilar Domestic Materials and Wastes Thereof . Upon the exportation of articles manufactured orproduced in the Philippines, including the packing,

covering, putting up, marking or labeling thereof,either in whole or in part of imported materials, orfrom similar domestic materials of equal quantityand productive manufacturing quality and value,such question to be determined by the Collector ofCustoms, there shall be allowed a drawback equal inamount to the duties paid on the imported materialsso used, or where similar domestic materials areused, to the duties paid on the equivalent importedsimilar materials, less one per cent thereof:Provided,That the exportation shall be made within


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three years after the importation of the foreignmaterial used or constituting the basis fordrawback: And Provided, further, That when thearticles exported or coverings thereof are in part ofmaterials grown or produced in the Philippines notentitled to drawback under this section, theimported materials, or the similar domesticmaterials of equal quantity and productive

manufacturing quality and value entitled todrawback, shall so appear in the completed articlesor packages that the quantity or measure thereofmay be ascertained: And Provided, finally,That theimported materials, or the similar domesticmaterials entitled to drawback under this sectionfor which drawback is claimed, shall be identified;that the quantity of such materials used and theamount of duty paid thereon or, if the domesticmaterials, paid upon its equivalent, shall beascertained; and that the fact of their exportationshall be established; and the refund if made shall bepaid to the manufacturer, producer, or exporter, orto the duly authorized agent of any of them, underand in accordance with such rules and regulations asthe Commissioner of Customs shall prescribe withthe approval of the department head.

.TITLE IIADMINISTRATIVE PROVISIONS

PART 1BASES OF ASSESSMENT OF DUTY.Sec. 201. Basis of Dutiable Value. Whenever animported article is subject to an ad valorem rate ofduty, the duty shall be assessed upon the marketvalue or price at which, at the time of exportation,the same, like or similar article is freely offered forsale in the principal markets of the exportingcountry for exportation to the Philippines, in theusual wholesale quantities and in the ordinarycourse of trade (excluding internal excise taxes tobe remitted or rebated), plus ordinary expensesprior and incidental to the lading of such article onboard the vessel or aircraft at the port of export(including taxes or duties, if any) and freight paid aswell as insurance premium paid covering thetransportation of such article to the port of entry inthe Philippines.

.When the value of the article cannot be ascertainedin accordance with the preceding paragraph, thevalue shall be the domestic wholesale market valueor selling price of the same, like or similar importedarticle in the principal market of the Philippines onthe date of exportation of the article underappraisement, in the usual wholesale quantities andin the ordinary course of trade, minus the importduty and other taxes as well as a commission notexceeding six per centum if any has been paid or

contracted to be paid on goods secured otherwisethan by purchase, and profits not to exceed eightper centum and a reasonable allowance for generalexpenses not to exceed eight per centum onpurchased goods, and all other expenses incidentalto the delivery from the port of importation to theprincipal market in the Philippines.

Sec. 202. Bases of Dutiable Weight.

On articlesthat are subject to specific rate of duty, based onweight, the duty shall be ascertained as follows:a. When articles are dutiable by the gross weight,the dutiable weight thereof shall be the weight ofsame, together with the weight of all containers,packages, holders and packings, of any kind, inwhich said articles are contained, held or packed atthe time of importation.

b. When articles are dutiable by the legal weight,the dutiable weight thereof shall be the weight ofsame, together with the weight of the immediatecontainers, holders and/or packing in which sucharticles are usually contained, held or packed at thetime of importation and/or, when imported in retailpackages, at the time of their sale to the public inusual retail quantities: Provided, That when articlesare packed in single container, the weight of thelatter shall be included in the legal weight.

.c. When articles are dutiable by the net weight, thedutiable weight thereof shall be only the actualweight of the articles at the time of importation,excluding the weight of the immediate and all othercontainers, holders or packing in which such articlesare contained, held or packed.

d. Articles affixed to cardboard, cards, paper, woodor similar common material shall be dutiabletogether with the weight of such holders.

e. When a single package contains imported articlesdutiable according to different weights, or to weightand value, the common exterior receptacles shall beprorated and the different proportions thereoftreated in accordance with the provisions of thisCode as to the dutiability or non-dutiability of suchpacking.

Sec. 203. General Rules of Classification.

Theinterpretation and application of the provisions ofthis Code relating to the classification of articlesimported into the Philippines shall be governed bythe following principles:

RULE 1. The titles of schedules, chapters andsubchapters are provided for ease of reference only;for legal purposes, classification shall bedetermined according to the terms of the headingsor subheadings and any relative schedule or chapter


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notes and, provided such headings, subheadings ornotes do not otherwise require, according to thesucceeding rules.

.RULE 2. Any reference in a heading or subheading toa material or substance shall include a reference tomixtures or combinations of that material orsubstance with other materials or substances. Any

reference to articles of a given material orsubstance shall include a reference to articlesconsisting wholly or partly of such material orsubstance. The classification of articles consisting ofmore than one material or substance shall beaccording to the principles of Rule 3..RULE 3. When articles are, prima facie, classifiableunder two or more headings or subheadings,classification shall be effected as follows:a. The heading or subheading which provides themost specific description shall be preferred to anyother heading or subheading providing a moregeneral description..b. Mixtures and composite articles which consist ofdifferent materials or are made up of differentcomponents and which cannot be classified byreference to "a" shall be classified as if theyconsisted of the material or component which givethe articles their essential character, insofar as thiscriterion is applicable..c. When articles cannot be classified by referenceto "a" or "b" they shall be classified under theheading or subheading which provides the highestrate of duty.

RULE 4. Where in a note to a schedule or chapter itis provided that certain articles are not covered bythat schedule or chapter a reference being made toanother schedule or chapter or to a particularheading or subheading, the note shall, unless thecontext requires otherwise, refer to all the articlesfalling within that other schedule or chapter orheading or subheading notwithstanding that onlycertain of those articles are referred to bydescription in the note..RULE 5. When dutiable and duty-free articles or

those dutiable at different rates are packedtogether or mingled in such manner that the valueof each class of such article cannot be readilydetermined by the officials of the Bureau ofCustoms, all such articles shall pay duty at the rateapplicable to that article in the package which issubject to the highest rate of duty, unless theimporter or consignee segregates such article at hisown risk and on his account, under the supervisionof customs officials, within fifteen days after theacceptance of import entry covering same, and

before delivery, in order that the value of eacharticle may be determined..RULE 6. In classifying manufactured products, noaccount shall be taken of the following:a. Insignificant parts of composite goods, inparticular such as are used solely for mounting orconnecting separate parts (e.g., nails, rivets,

screws, washers, gaskets, locks, clamps, eyelets,clasps, hinges, bolts, cornerpieces, bands, threads,strings, beltings, straps, ropes);.b. Negligible processing, refinement anddecorations;.c. Manufacturers' marks or names or trade marks,indications of the country of origin of the types ofarticles, their sizes or capacities, calibration marks,indications of graduation and the like, not of anornamental character.

RULE 7. Unless otherwise provided for, unfinishedand incomplete articles shall be classified as thefinished and complete articles, provided theirintended use is recognizable.

RULE 8. Unless otherwise provided for, the separateparts and unassembled pieces of articles whichnormally consist of various component parts, shallbe classified as complete articles, when importedtogether by the same importer, owner or consigneefrom the same seller or shipper on the same vesselor vehicle. The absence of certain non-essentialparts does not affect the application of thisprovision..RULE 9. Accessories and spare parts shall beclassified with the articles with which they areimported, when, by their character and quantity,they correspond to such articles and when they areusually sold together with them and are included inthe price of such article.

.RULE 10. Cases, boxes, caskets, sheaths and thelike, of normal type (e.g.,such as are used forcutlery, binoculars, microscopes, watches, musicalinstruments, weapons, sport goods) imported withthe corresponding articles, shall be classified as

such articles; if imported separately, they shall beclassified under the corresponding heading orsubheading of this Code.

RULE 11. No duties shall be assessed on account ofthe usual coverings or holdings of articles dutiableotherwise than ad valorem, nor those free of duty,except as in this Code expressly provided, but ifthere be used for covering or holding importedarticles, whether dutiable or free, any unusualarticle, form or material adapted for use otherwise


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than in the bona fide preservation or transportationof such article to the Philippines, such covering orholding shall be classified under the correspondingheading or subheading of this Code.

RULE 12. When the interior container or packing ofany article dutiable by weight is of an unusualcharacter, such container or packing shall be

classified under the corresponding heading orsubheading of this Code..RULE 13. When an article falling within a heading orsubheading is subject to ad valorem or specific rateof duty, it shall be subject to either the ad valoremor the specific rate of duty whichever is higher.

RULE 14.Unless otherwise provided for, the term"used" or any provision indicating designation byuse, for the purpose of classification and taxation ofarticles shall mean the chief or predominant use ofsuch articles notwithstanding any fugitive orincidental use to which such articles may besubjected

RULE 15. Articles not falling within any heading orsubheading of this Code shall be classified under theheading or subheading appropriate to articles towhich they are most akin.

Sec. 204. Rate of Exchange. For the assessmentand collection of import duty upon imported articlesand for other purposes, the value and prices thereofquoted in foreign currency shall be converted intothe currency of the Philippines at the current rateof exchange or value specified or published, fromtime to time, by the Central Bank of thePhilippines..Sec. 205. Effective Date of Rates of Import Duty. Imported articles shall be subject to the rate orrates of import duty existing at the time of entry, orwithdrawal from warehouse in the Philippines, forconsumption..On and after the day when this Code shall go intoeffect all articles previously imported, for which noentry has been made, and all articles previouslyentered without payment of duty and under bond

for warehousing, transportation, or any otherpurpose, for which no permit of delivery to theimporter or his agent has been issued, shall besubject to the rates of duty imposed by this Codeand to no other duty, upon the entry, or withdrawalthereof from warehouse, for consumption.

On articles abandoned or forfeited to, or seized by,the government, and then sold at public auction,the rate of duty and the tariff in force on the dateof the auction shall apply: Provided, That duty

based on the weight, volume and quantity ofarticles shall be levied and collected on the weight,volume and quantity at the time of their entry intothe warehouse or the date of abandonment,forfeiture and/or seizure.

Sec. 206. Entry, Withdrawal from Warehouse, forConsumption. Imported articles shall be deemed

"entered" in the Philippines for consumption whenthe specified entry form is properly filed andaccepted, together with any related documentsrequired by the provisions of this Code and/orregulations to be filed with such form at the time ofentry, at the port or station by the customs officialdesignated to receive such entry papers and anyduties, taxes, fees and/or other lawful chargesrequired to be paid at the time of making such entryhave been paid or secured to be paid with thecustoms official designated to receive such monies,provided that the article has previously arrivedwithin the limits of the port of entry..Imported articles shall be deemed "withdrawn" fromwarehouse in the Philippines for consumption whenthe specified form is properly filed and accepted,together with any related documents required byany provisions of this Code and/or regulations to befiled with such form at the time of withdrawal, bythe customs official designated to receive thewithdrawal entry and any duties, taxes, fees and/orother lawful charges required to be paid at the timeof withdrawal have been deposited with thecustoms official designated to receive suchpayment.

Sec. 207. Revised Trade Agreement not Affected.

Nothing in this Code shall be construed to abrogateor in any manner impair or affect the provisions ofthe Revised Agreement concluded between thePhilippines and the United States on September 6,1955.

PART 2SPECIAL DUTIES

.Sec. 301. Dumping Duty. a. Whenever theSecretary of Finance (hereinafter called theSecretary") has reason to believe, from invoices or

other papers or from information made available tohim by any government agency or interested party,that a specific kind or class of foreign article,whether dutiable or duty-free, is being sold or islikely to be sold for exportation to, or in, thePhilippines, at a price less than its fair value, ashereinafter defined, the importation or sale ofwhich might injure, or prevent the establishmentof, or is likely to injure an industry in thePhilippines, he shall so advise the Tariff Commission


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(hereinafter called the "Commission")..b. The Commission, upon receipt of such advicefrom the Secretary, shall conduct an investigation to1. Verify if the kind or class of articles in question isbeing sold or is likely to be sold for exportation to,or in, the Philippines at a price less than its fair

value;

2. Determine if, as a result thereof, an industry inthe Philippines is being injured or is likely to beinjured or is prevented from being established byreason of the importation or sale of such kind orclass of article into the Philippines; and.3. Ascertain the difference, if any, between thepurchase price or, in the absence thereof, theexporter's sales price, and the fair value of thearticle. The Commission shall submit its findings tothe Secretary within one month after receipt of theaforesaid advice.

c. The Secretary shall, within fifteen days from thereport of the Commission, decide whether thearticle in question is being imported in violation ofthis section and shall give due notice of such findingand shall direct the Commissioner of Customs tocause the dumping duty, to be levied, collected andpaid, as prescribed in this section, in addition to anyother duties, taxes and charges imposed by law onsuch article.

.d. The "dumping duty"as provided for in subsection"e"hereof shall be equal to the difference betweenthe purchase price or, in the absence thereof, theexporter's sales price, and the fair value of thearticle..e. For the purpose of this section

1. The "fair value" of an article shall be its foreignmarket value, or, in the absence of such value, itscost of production.

2. The "purchase price" of an imported article shallbe the price at which such article has beenpurchased or agreed to be purchased, prior to the

time of exportation, by the person by whom or forwhose account the article is imported, plus, whennot included in such price (a) The cost of all containers and coverings and allother costs, charges and expenses incident toplacing the article in condition, packed ready forshipment to the Philippines;

(b) The amount of any export tax paid in thecountry of exportation on the exportation of thearticle to the Philippines;

.(c) The amount of any import duties imposed by thecountry of exportation which have been rebated, orwhich have not been collected, by reason of theexportation of the article to the Philippines; and.(d) The amount of any taxes imposed in the countryof exportation upon the manufacturer, producer or

seller, in respect to the manufacture, production orsale of the article, which have been rebated, orwhich have not been collected, be reason of theexportation of the article of the Philippines.

.Any additional costs, charges and expenses incidentto bringing the article from the place of shipment inthe country of exportation to the place of deliveryin the Philippines and Philippine customs dutiesimposed thereon shall not be included

3. The "exporter's sale price" of an imported articleshall be the price at which such article is sold oragreed to be sold in the Philippines, before or afterthe time of exportation, by or for the account of theexporter, including (a) The cost of all containers and coverings and allother costs, charges and expenses incident toplacing the article in condition, packed ready forshipment to the Philippines;

(b) The amount of any import duties imposed bythe country of exportation which have beenrebated, or which have not been collected, byreason of the exportation of the article to thePhilippines; and.(c) The amount of any taxes imposed in the countryof exportation upon the manufacturer, producer orseller in respect to the manufacture, production orsale of the article, which have been rebated, orwhich have not been collected, by reason of itsexportation to the Philippines. The followingamount, if included, shall be deducted

(1) The amount of costs, charges and expenses, andPhilippine customs duties, incident to bringing thearticle from the place of shipment in the country ofexportation to the place of delivery in thePhilippines;

(2) The amount of commissions, if any, for selling inthe Philippines the particular article underconsideration;(3)An amount equal to the expenses, if any,generally incurred by or for the account of theexporter in the Philippines in selling identical orsubstantially identical article; and(4) The amount of any export tax paid in thecountry of exportation on the exportation of thearticle to the Philippines.


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4. The "foreign market value" of an imported articleshall be the price, at the time of exportation ofsuch article to the Philippines, at which such orsimilar article is sold or freely offered for sale to allpurchasers in the principal markets of the countryfrom which exported, in the usual wholesalequantities and in the ordinary course of trade forhome consumption (or, if not sold or offered for sale

for home consumption, then for exportation tocountries other than the Philippines), including thecost of all containers and coverings and all othercosts, charges and expenses incident to placing thearticle in condition packed ready for shipment tothe Philippines, except that in the case of articlespurchased or agreed to be purchased by the personby whom or for whose account the article isimported, prior to the time of exportation, theforeign market value shall be ascertained as of thedate of such purchase or agreement to purchase. Inthe ascertainment of foreign market value for thepurpose of this section, no pretended sale or offerfor sale, and no sale or offer for sale intended toestablish a fictitious market, shall be taken intoaccount.

5. The "cost of production" of an imported articleshall be the sum of (a) The cost of materials of, and of fabrication,manipulation or other process employed inmanufacturing or producing, identical orsubstantially identical article, at a time precedingthe date of shipment of the particular article underconsideration which would ordinarily permit themanufacture or production of the particular articleunder consideration in the usual course of business;(b) The usual general expenses not less than 10 percent of such cost, in the case of identical orsubstantially identical articles;(c) The cost of all containers and coverings, and allother costs, charges and expenses incident toplacing the particular article under consideration incondition, packed ready for shipment to thePhilippines; and(d) An addition for profit not less than 8 per cent ofthe sum of the amounts determined undersubparagraphs (a) and (b) hereof, equal to the profitwhich is originally added, in the case of articles ofthe same general character as the particular article

under consideration, by manufacturers or producersin the country of manufacture or production whoare engaged in the same general trade as themanufacturer or producer of the particular articleunder consideration.f. For the purposes of this section the "exporter" ofan imported article shall be the person by whom orfor whose account the article is imported into thePhilippines 1. If such person is the agent or principal of theexporter, manufacturer or producer; or

2. If such person owns or controls, directly orindirectly, through stock ownership or control orotherwise, any interest in the business of theexporter, manufacturer or producer; or3. If the exporter, manufacturer or producer ownsor controls, directly or indirectly, through stockownership or control or otherwise, any interest inany business conducted by such persons; or

4. If any person or persons, jointly or severally,directly or indirectly, through stock ownership orcontrol or otherwise, own or control in theaggregate 20 per cent or more of the voting poweror control in the business carried on by the personby whom or for whose account the article isimported into the Philippines, and also 20 per centor more of such power or control in the business ofthe exporter, manufacturer or producer.g. Pending investigation and final decision of thecase, the article in question, and articles of thesame specific kind or class subsequently importedunder similar circumstances, shall be released tothe owner, importer, consignee or agent upon thegiving of a bond in an amount equal to the doublethe estimated value thereof. Articles which mayhave been delivered under the provision of sectionfifteen hundred and three of this Code prior to theinstitution of the investigation provided in thissection shall, pending final decision, be orderedreturned to the custody of the collectors of customsunless released under bond in accordance with thissection.h. Any aggrieved party may only appeal the amountof dumping duty that is levied and collected by theCommissioner of Customs to the Court of TaxAppeals in the same manner and within the sameperiod provided for by law in the case of appealsfrom decisions of the Commissioner of Customs.

i. (1) The article, if it has not been previouslyreleased under bond as provided in subsection "g"hereof, shall be released after payment by the partyconcerned of the corresponding dumping duty inaddition to any other duties, taxes and charges, ifany, or re-exported by the owner, importer,consignee or agent, at his option and expense, uponthe filing of a bond in an amount equal to doublethe estimated value of the article, conditioned uponthe presentation of a landing certificate issued by a

consular officer of the Philippines at the country ofdestination; or(2) If the article has been previously released underbond, as provided in subsection "g" hereof, the partyconcerned shall be required to pay thecorresponding dumping done in addition to anyother duties, taxes and charges, if any.j. Any investigation to be conducted by theCommission under this section shall include ahearing or hearings where the owner, importer,consignee or agent of the imported article, the local


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producers of a like article, other parties directlyaffected, and such other parties as in the judgmentof the Commission are entitled to appear, shall begiven an opportunity to be heard and to presentevidence bearing on the subject matter.k. It shall be the duty of collectors of customs at allports of entry to levy and collect the dumping dutyin accordance with subsection "d" hereof on the

specific kind or class of article as to which theSecretary has made a decision of dumping.

It shall also be their duty to bring to the attentionof the Secretary, thru the Commissioner of Customs,any case coming within their notice which may, intheir opinion, require action as provided in thissection.

l. The Secretary shall promulgate all rules andregulations necessary to carry out the provisions ofthis section.

Sec. 302. Countervailing Duty. a. On articlesdutiable under this Code, upon the production,manufacture or export of which any bounty, subsidyor subvention is directly or indirectly granted in thecountry of origin and/or exportation, and theimportation of which has been determined by theSecretary, after investigation and report of theCommission, as likely to materially injure anestablished industry, or prevent or considerablyretard the establishment of an industry in thePhilippines, there shall be levied a countervailingduty equal to the ascertained or estimated amountof such bounty, subsidy or subvention:Provided,That the exception of any exported article from aduty or tax imposed on like articles when destinedfor consumption in the country of origin and/orexportation or the refunding of such duty or tax,shall not be deemed to constitute a grant of abounty, subsidy or subvention within the meaning ofthis section; however, should an article be alloweddrawback by the country of origin and/orexportation, only the ascertained or estimatedexcess of the amount of the drawback over the totalamount of the duties and/or internal taxes, if any,shall constitute a bounty, subsidy or subvention.

b. The Commission, on its own motion or upon

application of any interested party, when in itsjudgment there is good and sufficient reasontherefor, shall ascertain, determine or estimate thenet amount of such bounty, subsidy or subventionand shall transmit to the Secretary the amounts soascertained, determined or estimated, if any.Wherever it is ascertained that the conditions whichnecessitated the imposition of the countervailingduty have ceased to exist, and the Commission shallso certify to the Secretary, the latter shall take the

necessary steps to suspend or discontinue theimposition of such duty.

c. The Secretary shall make all rules and regulationsnecessary to carry out the provisions of thissection.

Sec. 303. Marking of Imported Articles and

Containers.

a. Marking of Articles.

Except ashereinafter provided, every article of foreign origin(or its container, as provided in subsection "b"hereof) imported into the Philippines shall bemarked in any official language of the Philippinesand in a conspicuous place as legibly, indelibly andpermanently as the nature of the article (orcontainer) will permit in such manner as to indicateto an ultimate purchaser in the Philippines the nameof the country of origin of the article. TheCommissioner of Customs shall, with the approval ofthe department head, issue rules and regulations to(1) Determine the character of words and phrases orabbreviations thereof which shall be acceptable asindicating the country of origin and prescribe anyreasonable method of marking, whether by printing,stenciling, stamping, branding, labeling or by anyother reasonable method, and a conspicuous placeon the article or container where the marking shallappear;

(2) Require the addition of any other words orsymbols which may be appropriate to preventdeception or mistake as to the origin of the articleor as to the origin of any other article with whichsuch imported article is usually combinedsubsequent to importation but before delivery to anultimate purchaser; and

(3) Authorize the exception of any article from therequirements of marking if (a) Such article is incapable of being marked;(b) Such article cannot be marked prior to shipmentto the Philippines without injury;(c) Such article cannot be marked prior to shipmentto the Philippines, except at an expenseeconomically prohibitive of its importation;(d) The marking of a container of such article willreasonably indicate the origin of such article;

(e) Such article is a crude substance;(f) Such article is imported for use by the importerand not intended for sale in its imported or anyother form;(g) Such article is to be processed in the Philippinesby the importer or for his account otherwise thanfor the purpose of concealing the origin of sucharticle and in such manner that any markcontemplated by this section would necessarily beobliterated, destroyed or permanently concealed;


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(h) An ultimate purchaser, by reason of thecharacter of such article or by reason of thecircumstance of its importation, must necessarilyknow the country of origin of such article eventhough it is not marked to indicate its origin;(i) Such article was produced more than twentyyears prior to its importation into the Philippines; or(j) Such article cannot be marked after importation

except at an expense which is economicallyprohibitive, and the failure to mark the articlebefore importation was not due to any purpose ofthe importer, producer, seller or shipper to avoidcompliance with this section.b. Marking of Containers. Whenever an article isexcepted under subdivision (3) of subsection "a" ofthis section from the requirements of marking, theimmediate container, if any, of such article, or suchother container or containers of such article as maybe prescribed by the Commissioner of Customs withthe approval of the department head, shall bemarked in such manner as to indicate to an ultimatepurchaser in the Philippines the name of the countryof origin of such article in any official language ofthe Philippines, subject to all provisions of thissection, including the same exceptions as areapplicable to articles under subdivision (3) ofsubsection "a".

c. Marking Duty for Failure to Mark. If at the timeof importation any article (or its container, asprovided in subsection "b" hereof), is not marked inaccordance with the requirements of this section,there shall be levied, collected and paid upon sucharticle a marking duty of 5 per cent ad valorem,which shall be deemed to have accrued at the timeof importation, except when such article is exportedor destroyed under customs supervision and prior tothe final liquidation of the corresponding entry.

d. Delivery Withheld until Marked. No importedarticle held in customs custody for inspection,examination or appraisement shall be delivereduntil such articles and/or their containers, whetherreleased or not from customs custody, shall havebeen marked in accordance with the requirementsof this section and until the amount of dutyestimated to be payable under subsection "c" of thissection shall have been deposited. Nothing in this

section shall be construed as excepting any articleor its container from the particular requirements ofmarking provided for in any provisions of law.

.e. The failure or refusal of the owner or importer tomark the articles as herein required within a periodof thirty days after due notice shall constitute as anact of abandonment of said articles and theirdisposition shall be governed by the provisions ofthis Code relative to abandonment of importedarticles.

.Sec. 304. Discrimination by Foreign Countries. a. The President, when he finds that the publicinterest will be served thereby, shall byproclamation specify and declare new or additionalduties in an amount not exceeding 50 per cent ofthe existing rates as hereinafter provided uponarticles wholly or in part the growth or product of,

or imported in a vessel of, any foreign countrywhenever he shall find as a fact that such country (1) Imposes, directly or indirectly, upon thedisposition in, or transportation in transit through orre-exportation from such country of any articlewholly or in part the growth or product of thePhilippines any unreasonable charge, exaction,regulation or limitation which is not equallyenforced upon the like articles of every foreigncountry; or

.(2) Discriminates in fact against the commerce ofthe Philippines, directly or indirectly, by law oradministrative regulation or practice, by or inrespect to any customs, tonnage, or port duty, fee,charge, exaction, classification, regulation,condition, restriction or prohibition, in such manneras to place the commerce of the Philippines at adisadvantage compared with the commerce of anyforeign country.

b. If at any time the President shall find it to be afact that any foreign country has not onlydiscriminated against the commerce of thePhilippines, as aforesaid but has, after the issuanceof a proclamation as authorized in subsection "a" ofthis section, maintained or increased its saiddiscriminations against the commerce of thePhilippines, the President is hereby authorized, if hedeems it consistent with the interests of thePhilippines, to issue a further proclamationdirecting that such product of said country or sucharticles imported in its vessels as he shall deemconsistent with the public interests, shall beexcluded from importation into the Philippines.

c. Any proclamation issued by the President underthe authority of this section shall, if he deems itconsistent with the interests of the Philippines,

extend to the whole of any foreign country or maybe confined to any subdivision or subdivisionsthereof; and the President shall, whenever hedeems the public interests require, suspend, revoke,supplement or amend any such proclamation.

.d. All articles imported contrary to the provisions ofthis section shall be forfeited to the Government ofthe Philippines and shall be liable to be seized,prosecuted and condemned in like manner andunder the same regulations, restrictions and


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provisions as may from time to time be establishedfor the recovery, collection, distribution andremission of forfeiture to the government by thetariff and customs laws. Whenever the provision ofthis section shall be applicable to importations intothe Philippines of articles wholly or in part thegrowth or product of any foreign country, they shallbe applicable thereto whether such articles are

imported directly or indirectly..e. It shall be the duty of the Commission toascertain and at all times to be informed whetherany of the discriminations against the commerce ofthe Philippines enumerated in subsections "a" and"b" of this section are practiced by any country; andif and when such discriminatory acts are disclosed,it shall be the duty of the Commission to bring thematter to the attention of the President, togetherwith recommendation.

f. The Secretary shall make such rules andregulations as are necessary for the execution ofsuch proclamation as the President may issue inaccordance with the provisions of this section.

g. The authority granted herein to the Presidentshall be exercised only when Congress is not insession.

PART 3FLEXIBLE TARIFF

Sec. 401. Flexible Clause. a. The President, uponinvestigation by the Commission andrecommendation of the National Economic Council,is hereby empowered to reduce by not more thanfifty per cent or to increase by not more than fivetimes the rates of import duty expressly fixed bystatute (including any necessary change inclassification) when in his judgment suchmodification in the rates of import duty is necessaryin the interest of national economy, general welfareand/or national defense..b. Before any recommendation is submitted to thePresident by the Council pursuant to the provisionsof this section, the Commission shall conduct aninvestigation in the course of which it shall hold

public hearings wherein interested parties shall beafforded reasonable opportunity to be present, toproduce evidence and to be heard. The Commissionmay also request the views and recommendations ofany government office, agency or instrumentality,and such office, agency or instrumentality shallcooperate fully with the Commission.

c. The President shall have no authority to transferarticles from the duty-free list to the dutiable list

nor from the dutiable list to the duty-free list of thetariff.

d. The power of the President to increase ordecrease rates of import duty within the limits fixedin subsection "a" shall include the authority tomodify the form of duty. In modifying the form ofduty the corresponding ad valorem or specific

equivalents of the duty with respect to imports fromthe principal concerning foreign country for themost recent representation period shall be used asbasis.

e. The Commissioner of Customs shall regularlyfurnish to the Commission a copy each of allcustoms import entries containing every pertinentinformation appearing in the collectors' liquidatedduplicates, including the consular invoice and/orthe commercial invoice. The Commission or its dulyauthorized agents shall have access to and the rightto copy all the customs import entries and otherdocuments appended thereto as finally in theGeneral Auditing Office.

f. The Commission is authorized to adopt suchreasonable procedure, rules and regulations as itmay deem necessary to carry out the provisions ofthis section.

g. Any order issued by the President pursuant to theprovisions of this section shall take effect thirtydays after its issuance.

h. The provisions of this section shall not apply toany article the importation of which into thePhilippines is or may be governed by Section 402 ofthis Code.

i. The authority herein granted to the Presidentshall be exercised only when Congress is not insession.

Sec. 402. Promotion of Foreign Trade. a. For thepurpose of expanding foreign markets for Philippineproducts as a means of assisting in the economicdevelopment of the country, in overcomingdomestic unemployment, in increasing thepurchasing power of the Philippine peso, and in

establishing and maintaining better relationshipbetween the Philippines and other countries, thePresident, upon investigation by the Commission andrecommendation of the National Economic Council,is authorized from time to time:(1) To enter into trade agreements with foreigngovernments or instrumentalities thereof; and.(2) To modify import duties (including any necessarychange in classification) and other importrestrictions, as are required or appropriate to carry


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out and promote foreign trade with other countries:Provided, however, That in modifying import dutiesno increase shall exceed by five times or thedecrease be more than fifty per cent of the rate ofduty expressly fixed by this Code.b. The proclaimed duties and other importrestrictions shall apply to articles the growth,produce or manufacture of all foreign countries,

whether imported directly or indirectly: Provided,That the President may suspend the application ofany concession to articles the growth, produce ormanufacture of any country because of itsdiscriminatory treatment of Philippine commerce orbecause of other acts (including the operations ofinternational cartels) or policies which in his opiniontend to defeat the purposes set in this section; andthe proclaimed duties and other import restrictionsshall be in force and effect from and after such timeas is specified in the proclamation. The Presidentmay at any time terminate any such proclamation inwhole or in part..c. Every trade agreement concluded pursuant to thissection shall be subject to termination upon duenotice to the foreign government concerned at theend of not more than five years from the date onwhich the agreement comes into force and, if notthen terminated, shall be subject to terminationthereafter upon not more than six months' notice.

d. The authority of the President to enter into tradeagreements under this section shall terminate onthe expiration of five years from the date ofenactment of this Code: Provided,That tradeagreements concluded pursuant to the provisions ofthis section and subsisting as of the date of theexpiration of this authority shall remain in force forthe period fixed in the agreement in and may not beextended but he may be sooner terminated inaccordance with the preceding subsection..e. Nothing in this section shall be construed to giveany authority to cancel or reduce in any manner anyof the indebtedness of any foreign country to thePhilippines or any claim of the Philippines againstany foreign country.

f. Before any trade agreement is conducted with

any foreign government or instrumentality thereof,reasonable public notice of the intention tonegotiate an agreement with such a government orinstrumentality shall be given in order that anyinterested person may have an opportunity topresent his views to the Commission which shallseek information and advice from the Department ofAgriculture and Natural Resources, the Departmentof Commerce and Industry, the Central Bank of thePhilippines and from such other sources as it maydeem appropriate. chan robles virtual

g. (1) The Commission, upon its own motion, or inpursuance of a request of the President or aresolution of either house of Congress, or uponapplication of any interested party when in thejudgment of the Commission there is good andsufficient reason therefor, shall conduct aninvestigation to determine whether any product, as

a result of any concession granted under a tradeagreement, is being imported into the Philippines insuch increased quantities as to cause or threatenserious injury to the domestic industry producinglike or directly competitive products. TheCommission shall render a report thereof to thePresident, through the National Economic Council,within three months after the motion, request,resolution or application was received.

Should the Commission find that the representationsmade in accordance with the preceding paragraphare justified, it shall recommend to the President,through the National Economic Council thewithdrawal or modification of the concession, itssuspension in whole or in part, or the establishmentof import quota which shall not be less than ten percentum or more than one hundred per centum ofthe average annual quantity imported or, in theabsence thereof, the average annual value of suchimportation, during the three calendar yearsimmediately preceding the date such quota is fixed,to the extent and for the time necessary to preventor remedy such injury.

2) Upon receipt of the report of the findings andrecommendation of the Commission, the Presidentmay prescribe such adjustments in the rates ofimport duties, or such other modifications as arerecommended by the Commission to be necessary toprevent or remedy serious injury to the respectivedomestic industry.

h. Nothing in this section shall be construed topreclude giving effect to any executive agreementor any future preferential trade agreement with theUnited States, or to extend to any other country thepreferential treatment accorded by the Philippinesto the products of the United States of America.

i. The Commission is authorized to adopt suchreasonable procedure, rules and regulations as itmay deem necessary to execute its functions underthis section.


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PART 4TARIFF COMMISSION

Sec. 501. Chief Officials of the Tariff Commission. The Tariff Commission shall be under a chief andassistant chief to be known as Commissioner andAssistant Commissioner, and who shall be appointedby the President with the consent of the Commission

on Appointments. They shall hold office during goodbehavior unless sooner removed in accordance withlaw.The Commissioner and Assistant Commissioner shalleach receive twelve thousand and ten thousandpesos, per annum, respectively.

Sec. 502. Qualifications. No person shall beeligible for appointment as Commissioner and asAssistant Commissioner unless he is a natural-borncitizen of the Philippines and who by experienceand academic training is possessed of qualificationsrequisite for developing expert knowledge of tariffproblems. They shall not, during their tenure inoffice, engage in the practice of any profession, orintervene directly or indirectly in the managementor control of any private enterprise which may, inany way, be affected by the functions of his office;nor shall he, directly or indirectly, be financiallyinterested in any contract with the Government, orany subdivision or instrumentality thereof..Sec. 503. Appointment and Compensation ofOfficials and Employees. All employees of theCommission shall be appointed by the Commissionerin accordance with the civil service law except aprivate secretary each to the Commissioner and theAssistant Commissioner..The Commissioner shall adopt a salary schedule forthe principal executive and technical personnel inaccordance with the following rates, any provisionof law to the contrary notwithstanding:1. Executive director P8,400.002. Technical assistants 7,200.003. Chiefs of division 7,200.004. Commodity specialists 6,600.005. Research economists, tariff researchers, costaccountants, and statisticians 6,000.006. Librarian-researcher 4,800.00

7. Junior commodity specialists, junior researcheconomists, junior tariff researchers, junior costaccountants, and junior statisticians 3,600.00

Sec. 504. Official Seal. The Commission isauthorized to adopt an official seal..Sec. 505. Functions of the Commission. TheCommission shall investigate (a) theadministration of and the fiscal and industrial

effects of the tariff and customs laws of this countrynow in force or which may hereafter be enacted; .(b) the relations between the rates of duty on rawmaterials and the finished or partly finishedproducts;(c) the effects of ad valorem and specific duties andof compound specific and ad valorem duties;(d) all questions relative to the arrangement of

schedules and classification of articles in the severalschedules of the tariff law;(e) the tariff relations between the Philippines andforeign countries, commercial treaties, preferentialprovisions, economic alliances, the effect of exportbounties and preferential transportation rates;(f) the volume of importations compared withdomestic production and consumption;(g) conditions, causes, and effects relating tocompetition of foreign industries with those of thePhilippines, including dumping and cost ofproduction; and(h) in general, to investigate the operation ofcustoms and tariff laws, including their relation tothe national revenues, their effect upon theindustries and labor of the country, and to submitreports of its investigations as hereinafterprovided.

Sec. 506. Assistance to the President and Congress.In order that the President and the Congress maysecure information and assistance, it shall be theduty of the Commission to (a) Ascertain conversion costs and costs ofproduction in the principal growing, producing ormanufacturing centers of the Philippines, wheneverpracticable;(b) Ascertain conversion costs and costs ofproduction in the principal growing, producing ormanufacturing centers of foreign countries ofarticles imported into the Philippines whenever suchconversion costs or costs of production arenecessary for comparison with those in thePhilippines;(c) Select and describe representative articlesimported into the Philippines similar to orcomparable with those locally produced; select anddescribe articles of the Philippines similar to orcomparable with such imported articles; and obtainand the samples of articles so selected, whenever

advisable;(d) Ascertain import costs of such representativearticles so selected; .(e) Ascertain the grower's, producer's ormanufacturer's selling prices in the principalgrowing, producing or manufacturing centers of thePhilippines of the articles of the Philippines soselected; and(f) Ascertain all other facts which will show thedifferences in or which affect competition between


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articles of the Philippines and those imported in theprincipal markets of the Philippines.

Sec. 507. Reports of the Commission. TheCommission shall place at the disposal of thePresident any member of the Congress of thePhilippines or each member thereof all informationat its command; shall make such investigation and

report as may be required by the President and theCongress of the Philippines and shall report to thePresident and Congress on the first Monday ofDecember of each year hereafter a statement ofmethods adopted and a summary of all reportsmade during the year..Sec. 508. Access to Documents. The Commissionor its duly authorized representative shall haveaccess to any document, paper or record, pertinentto the subject matter under investigation, in thepossession of any person, firm, co-partnership,corporation or association engaged in theproduction, importation or distribution of anyarticle under investigation, and shall have power tosummon witnesses, take testimony, administeroaths, and to issue subpoena duces tecum requiringthe production or books, papers or documentsrelating to the matter under investigation..Sec. 509. Sworn Statements. The Commission mayorder the taking of sworn statements at any stage ofany proceeding or investigation before it. Suchsworn statements may be taken before any personhaving power to administer oaths..Sec. 510. Verified Statements. The Commission isauthorized to require any importer, grower,producer, manufacturer or seller to file with theCommission a statement, under oath, giving hisselling prices in the Philippines of any articleimported, grown, produced, fabricated ormanufactured by him..Sec. 511. Rules and Regulations of the Commission.The Commission shall adopt and promulgate suchrules and regulations as may be necessary to carryout the provisions of this Code..Sec. 512. Appropriation. The amount of three

hundred thousand pesos is hereby appropriated tocarry out the purpose of Part 4, Title II, Book I ofthis Code. Subsequent appropriations shall beprovided for in the succeeding GeneralAppropriation Act.

Sec. 513. Transitory Provision. Upon theeffectivity of this Code the personnel, funds,equipment, property and appropriations of theTariff Division under the Department of Finance are

hereby transferred to the Tariff Commission underthis Code


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BOOK IICUSTOMS LAW

TITLE ITHE BUREAU OF CUSTOMS

PART 1ORGANIZATION, FUNCTION AND JURISDICTION OF

THE BUREAU

Section 601. Chief Officials of Bureau of Customs. The Bureau of Customs shall have one chief and oneassistant chief, to be known respectively at theCommissioner (hereinafter known as the"Commissioner") and Assistant Commissioner ofCustoms, who shall each receive an annualcompensation in accordance with the ratesprescribed by existing laws. The AssistantCommissioner of Customs shall be appointed by theproper department head.

Sec. 602. Functions of the Bureau.

The generalduties, powers and jurisdiction of the bureau shallinclude:a. The assessment and collection of the lawfulrevenues from imported articles and all other dues,fees, charges, fines and penalties accruing underthe tariff and customs laws.

b. The prevention and suppression of smuggling andother frauds upon the customs.

c. The supervision and control over the entranceand clearance of vessels and aircraft engaged in

foreign commerce.

d. The general supervision, control and regulation ofvessels engaged in the carrying of passengers andfreight or in towage in coastwise trade and in thebays and rivers of the Philippines.

e. The prohibition and suppression of unnecessarynoises, such as explosion of gasoline engines, theexcessive blowing of whistles or sirens, and otherneedless and disturbing sounds made by water craftin the ports of the Philippines or in parts of riversincluded in such ports.

f. The exclusion, if the conditions of traffic shouldat any time so require, of vessels of more than onehundred and fifty tons from entering, berthing ormooring in the Pasig River.

g. The admeasurement, registration, documentingand licensing of vessels built or owned in thePhilippines, the recording of sales, transfers andencumbrances of such vessels, and the performanceof all the duties pertaining to marine registry.

h. The inspection of Philippine vessels, andsupervision over the safety and sanitation of suchvessels.

i. The enforcement of the lawful quarantineregulations for vessels entering Philippine ports.

j. The enforcement of the tariff and customs lawsand all other laws, rules and regulations relating tothe tariff and customs administration.

k. The licensing of marine officers who havequalified in the examination required by law to becarried on Philippine vessels, the determination ofthe qualifications of pilots, the regulation of thisservice, and the fixing of the fees which they maycharge.

l. The supervision and control over the handling offoreign mails arriving in the Philippines, for thepurpose of the collection of the lawful duty ondutiable articles thus imported and the preventionof smuggling through the medium of such mails.

Sec. 603. Territorial Jurisdiction. For the due andeffective exercise of the powers conferred by lawand to the extent requisite therefor, said bureaushall have the right of supervision and policeauthority over all seas within the jurisdiction of thePhilippines and over all coasts, ports, airports,harbors, bays, rivers and inland waters navigablefrom the sea.

When a vessel becomes subject to seizure by reasonof an act done in Philippine waters in violation ofthe tariff and customs laws, a pursuit of such vesselbegun within the jurisdictional waters may continuebeyond the maritime zone, and the vessel may beseized on the high sea. Imported articles which maybe subject to seizure for violation of the tariff andcustoms laws may be pursued in their transportationin the Philippines by land, water or air and suchjurisdiction exerted over it at any place therein asmay be necessary for the due enforcement of thelaw.

Sec. 604. Jurisdiction over Premises Used forCustoms Purposes. The Bureau of Customs shall,for customs purposes, have exclusive control,direction and management of custom-houses,warehouses, offices, wharves, and other premises inthe respective ports of entry, in all cases withoutprejudice to the general police powers of the city ormunicipality wherein such premises are situated.

Sec. 605. Enforcement of Port Regulation of Bureauof Quarantine. Customs officials and employeesshall cooperate with the quarantine authorities in


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the enforcement of the port quarantine regulationspromulgated by the Bureau of Quarantine and shallgive effect to the same in so far as they areconnected with matters of shipping and navigation.

Sec. 606. Power of the President to SubjectPremises to Jurisdiction of Bureau of Customs. When any public wharf, landing place, street or

land, not previously under the jurisdiction of theBureau of Customs, in any port of entry, isnecessary or desirable for any proper customspurpose, the President of the Philippines may, byexecutive order, declare such premises to be underthe jurisdiction of the Bureau of Customs, andthereafter the authority of such Bureau in respectthereto shall be fully effective.

Sec. 607. Annual Report of Commissioner. Theannual report of the Commissioner shall, amongother things, contain a compilation of the (a)volume and value of articles imported into thePhilippines and the corresponding customs dutiesassessed and collected thereon itemized inaccordance with the tariff classification provided inthis Code and (b) volume and value of articlesexported from the Philippines for the precedingyear.

Sec. 608. Commissioner to Make Rules andRegulations. The Commissioner shall, subject tothe approval of the department head, make all rulesand regulations necessary to enforce the provisionsof this Code.

PART 2COLLECTION DISTRICTS AND PORTS OF ENTRY

Sec. 701. Collection Districts and Ports of Entrythereof . For administrative purposes, thePhilippines shall be divided into as many collectiondistricts as there are at present existing, therespective limits of which may be changed fromtime to time by the Commissioner, upon theapproval of the department head. The principalports of entry for the respective collection districtsshall be Manila, Sual, Tabaco, Cebu, Pulupandan,Sia-in, Iloilo, Davao, Legaspi, Zamboanga, Jolo,Aparri, Jose Panganiban, Cagayan, Cagayan,

Tacloban, San Fernando, Hinigaran, Dumaguete Cityand Batangas.

Sec. 702. Power of the President to Open and CloseSubports. Subports of entry may be opened orclosed by executive order, in the discretion of thePresident of the Philippines. When a subport isclosed, its existing personnel shall be reassigned toother duties by the Commissioner subject to theapproval of the department head.

Sec. 703. Collector of Customs at Port of Entry. Ateach principal port of entry there shall be aCollector of Customs (hereinafter known as the"Collector") who shall be responsible to theCommissioner, and who shall be the official head ofthe customs service in his port and district. TheCollector shall have jurisdiction over all mattersarising from the enforcement of tariff and customs

laws within his collection district: Provided,however, That the Commissioner shall have theauthority to review any such action upon appeal asprovided in section two thousand three hundred andthirteen of this Code. No appointment to anyposition under the Collector shall be made withoutthe recommendation of the Collector concerned.

Sec. 704. Seal of Collector of Customs. In theoffice of the Collector of a collection district thereshall be kept a seal of such design as theCommissioner shall describe, with the approval ofthe department head, with which shall be sealed alldocuments and records requiring authentication insuch office.

Sec. 705. Authority of Assistant or Deputy Collectorsof Customs. An assistant collector at a principalport of entry may, in the name of the Collector andsubject to his supervision and control, perform anyparticular act which might be done by the Collectorhimself; at subports, a deputy collector may, in hisown name, exercise the general powers of acollector, subject to the supervision and control ofthe Collector of the port.

Sec. 706. Appointment of Special Deputies withLimited Powers.

Collectors may, with the

approval of the Commissioner, appoint from theirforce such number of special deputies as may benecessary for the proper conduct of the publicbusiness, with authority to sign such documents andperform such service as may be specified in writing.

Sec. 707. Succession of Assistant or Deputy Collectorto Position of Acting Collector. In the absence ordisability of a Collector at any port or in case of avacancy in his office, the temporary discharge of hisduties shall devolve upon the assistant or deputycollector of the port. Where no assistant or deputy

collector is available, an official to serve in suchcontingency may be designated in writing by theCollector from his own force. The Collector makingsuch designation shall report the same withoutdelay to the Commissioner and the Auditor General,forwarding to them the signature of the person sodesignated.

Sec. 708. Designation of Official as CustomsInspector. At a coastwise port where no customsofficial or employee is regularly stationed, the


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Commissioner may designate any national,provincial or municipal official of the port to act asan inspector of customs for the purpose of enforcingthe laws and regulations of the Bureau of Customs inthe particular port; but all such designations shallbe made with the consent of the proper departmenthead of the official so designated.

Sec. 709. Authority of Collector to Remit Duties.

A Collector shall have discretionary authority toremit the assessment and collection of customsduties, taxes and other charges when the aggregateamount of such duties, taxes and other charges isless than ten pesos, and he may dispense with theseizure of articles of less than ten pesos in valueexcept in cases of prohibited importations or thehabitual or intentional violation of the tariff andcustoms laws.

Sec. 710. Records to be kept by Customs Officials. Collectors, assistant collectors, deputy collectors,surveyors, and other customs officials acting in suchcapacities are required to keep true, correct andpermanent records of their official transactions, tosubmit the same to the inspection of authorizedofficials at all times, and to turn over all recordsand official papers to their successors or otherauthorized officials.

Sec. 711. Port Regulation. A Collector mayprescribe local administrative regulations, notinconsistent with law or the general bureauregulations, for the government of his port ordistrict, the same to be effective upon approval bythe Commissioner.

Sec. 712. Reports of Collector to Commissioner. ACollector shall make report to the Commissionerfrom time to time concerning prospective or newlybegun litigation in his district touching mattersrelating to the customs service; and he shall, in suchform and detail as shall be required by theCommissioner, make regular monthly reports of alltransactions in his port and district.

TITLE IIREGISTRATION OF VESSELS, COASTWISE TRADE AND

LICENSING OF MARINE OFFICERS

PART 1REGISTRATION AND INSPECTION OF VESSELS, ANDLICENSING OF MARINE OFFICERS

Section 801. Registration and Documentation ofVessels. The Bureau of Customs is vested withexclusive authority over the registration anddocumentation of Philippine vessels. By it shall be

kept and preserved the records of registration andof transfers and encumbrances of vessels; and by itshall be issued all certificates, licenses or otherdocuments incident to registration anddocumentation, or otherwise requisite for Philippinevessels.

Sec. 802. Vessels Required to be Registered.

Every vessel used in the Philippine waters, not beinga transient of foreign registry shall be registered inthe Bureau of Customs. To this end, it shall be theduty of the master, owner or agent of every vesselto make application to the proper Collector for theregistration thereof within fifteen days after thevessel becomes subject to such registration.

A vessel of three tons gross or less shall not beregistered, unless the owner shall so desire, norshall documents or licenses of any kind be requiredfor such vessel, but the proper fee shall be chargedfor admeasurement, when admeasurement isnecessary, except when the same is engaged intowing or carrying of articles and passengers forhire.

Sec. 803. Where Registration to be Effected. Theregistration of a vessel shall be effected at its