cmta bicameral approved copy

8/20/2019 CMTA Bicameral Approved Copy

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REPUBLIC OF THE PHILIPPINES

CONGRESS OF THE PHILIPPINES

SIXTEENTH CONGRESSThird Regular Session

REPUBLIC ACT NO. ________

“AN ACT MODERNIZING THE CUSTOMS AND TARIFF ADMINISTRATION”

Be it enacted by the Senate and House of Representatives of the Philippines inCongress assembled:

TITLE I1

PRELIMINARY PROVISIONS2

CHAPTER 13

SHORT TITLE4

SECTION 100. Sho rt Tit le . – This Act shall be known as the “Customs5

Modernization and Tariff Act (CMTA).” 6

CHAPTER 27

GENERAL AND COMMON PROVISIONS8

SEC. 101. Declaration o f Policy . – It is hereby declared the policy of the State to9

protect and enhance government revenue, institute fair and transparent customs and10

tariff management that will efficiently facilitate international trade, prevent and curtail11

any form of customs fraud and illegal acts, and modernize customs and tariff12

administration. Towards this end, the State shall:13

(a) Develop and implement programs for the continuous enhancement of14

customs systems and processes that will harmonize customs procedures;15

(b) Adopt clear and transparent customs rules, regulations, policies and16

procedures, consistent with international standards and customs best practices;17

(c) Establish a regime of transparency of and accessibility to customs18

information, customs laws, rules, regulations, administrative policies, procedures and19

practices, in order to ensure informed, and diligent compliance with customs practices20

and procedures by stakeholders;21


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(d) Consult, coordinate and cooperate with other government agencies and the1

private sector in implementing and developing customs policy;2

(e) Provide a fair and expeditious administrative and judicial appellate remedy for3

customs related grievances and matters;4

(f) Employ modern practices in customs administration and utilize information5

and communications technology in the implementation of customs functions; and6

(g) Institute professionalism and meritocracy in customs tax administration by7

attracting and retaining competent and capable customs officers and personnel to8

enforce the provisions of this Act.9

SEC. 102. Defini t ion o f Terms . – As used in this Act:10

(a) Abatement refers to the reduction or diminution, in whole or in part, of duties11

and taxes where payment has not been made;12

(b) Actual or Outright Exportation refers to the customs procedure applicable to13

goods which, being in free circulation, leave the Philippine territory and are intended to14

remain permanently outside it; 15

(c) Admission refers to the act of bringing imported goods directly or through16

transit into a free zone; 17

(d) Airway Bill (AWB) refers to a transport document for airfreight used by airlines18

and international freight forwarders which specify the holder or consignee of the bill who19

has the right to claim delivery of the goods when they arrive at the port of destination. It20

is a contract of carriage that includes carrier conditions, such as limits of liability and21

claims procedures. In addition, it contains transport instructions to airlines and carriers,22

a description of the goods, and applicable transportation charges;23

(e) Appeal refers to the remedy by which a person who is aggrieved or adversely24

affected by any action, decision, order, or omission of the Bureau, seeks redress before25

the Bureau, the Secretary of Finance, or competent court, as the case may be; 26

(f) Assessment refers to the process of determining the amount of duties and27

taxes and other charges due on imported and exported goods; 28


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(g) Authorized Economic Operator (AEO) refers to the importer, exporter,1

customs broker, forwarder, freight forwarder, transport provider, and any other entity2

duly accredited by the Bureau based on the World Customs Organization (WCO)3

Framework of Standards to Secure and Facilitate Global Trade, the Revised Kyoto4

Convention (RKC), the WCO Supply Chain Management Guidelines and the various5

national best practices to promote trade facilitation and to provide a seamless6

movement of goods across borders through secure international trade supply chains7

with the use of risk management and modern technology; 8

(h) Bill of Lading (B/L) refers to a transport document issued by shipping lines,9

carriers and international freight forwarders or non-vessel operating common carrier for10

water-borne freight. The holder or consignee of the bill has the right to claim delivery of11

the goods at the port of destination. It is a contract of carriage that includes carrier12

conditions, such as limits of liability and claims procedures. In addition, it contains13

transport instructions to shipping lines and carriers, a description of the goods, and14

applicable transportation charges; 15

(i) Bureau refers to the Bureau of Customs;16

(j) Carrier refers to the person actually transporting goods or in charge of or17

responsible for the operation of the means of transport such as airlines, shipping lines,18

freight forwarders, cargo consolidators, non-vessel operating common carriers and19

other international transport operators;20

(k) Clearance refers to the completion of customs and other government21

formalities necessary to allow goods to enter for consumption, warehousing, transit or22

transshipment, or to be exported or placed under another customs procedure; 23

(l) Commission refers to the Tariff Commission; 24

(m) Conditional Importation refers to the customs procedure known under the25

Revised Kyoto Convention (RKC) as temporary admission in which certain goods can26

be brought into a customs territory conditionally relieved, totally or partially, from27

payment of import duties and taxes; such goods must be imported for a specific28


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purpose and must be intended for re-exportation within a specified period and without1

having undergone any substantial change except due to normal depreciation.2

(n) Customs Broker refers to any person who is a bona fide holder of a valid3

Certificate of Registration/Professional Identification Card issued by the Professional4

Regulatory Board and Professional Regulation Commission pursuant to Republic Act5

No. 9280, as amended, otherwise known as the “Customs Brokers Act of 2004;” 6

(o) Customs Office refers to any customs administrative unit that is competent7

and authorized to perform all or any of the functions enumerated under customs and8

tariff laws;9

(p) Customs Officer, as distinguished from a clerk or employee, refers to a10

person whose duty, not being clerical or manual in nature, involves the exercise of11

discretion in performing the function of the Bureau. It may also refer to an employee12

authorized to perform a specific function of the Bureau as provided in this Act;13

(q) Customs Territory refers to areas in the Philippines where customs and tariff14

laws may be enforced; 15

(r) Entry refers to the act, documentation and process of bringing imported goods16

into the customs territory, including goods coming from free zones;17

(s) Exportation refers to the act, documentation, and process of bringing goods18

out of Philippine territory;19

(t) Export Declaration refers to a statement made in the manner prescribed by20

the Bureau and other appropriate agencies, by which the persons concerned indicates21

the procedure to be observed for taking out or causing to be taken out any exported22

goods and the particulars of which the customs administration shall require; 23

(u) Flexible Clause refers to the power of the President upon recommendation of24

the NEDA (1) to increase, reduce or remove existing protective tariff rates of import25

duty, but in no case shall be higher than 100% ad valorem; (2) to establish import quota26

or to ban importation of any commodity as may be necessary; and (3) to impose27

additional duty on all import not exceeding 10% ad valorem whenever necessary;28


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(v) Foreign Exporter refers to one whose name appears on documentation1

attesting to the export of the product to the Philippines regardless of the manufacturer’s2

name in the invoice; 3

(w) Free Zone refers to special economic zones registered with the Philippine4

Economic Zone Authority (PEZA) under Republic Act No. 7916, as amended, duly5

chartered or legislated special economic zones and freeports such as Clark Freeport6

Zone, Poro Point Freeport Zone, John Hay Special Economic Zone and Subic Bay7

Freeport Zone under Republic Act No. 7227 as amended by Republic Act No. 9400, the8

Aurora Special Economic Zone under Republic Act No. 9490, as amended, the9

Cagayan Special Economic Zone and Freeport under Republic Act No. 7922, the10

Zamboanga City Special Economic Zone under Republic Act No. 7903, and Freeport11

Area of Bataan under Republic Act No. 9728 and such other freeports as established12

or may be created by law;13

(x) Goods refer to articles, wares, merchandise and any other items which are14

subject of importation or exportation;15

(y) Goods declaration refers to a statement made in the manner prescribed by16

the Bureau and other appropriate agencies, by which the persons concerned indicate17

the procedure to be observed in the application for the entry or admission of imported18

goods and the particulars of which the customs administration shall require;19

(z) Importation refers to the act of bringing in of goods from a foreign territory into20

Philippine territory, whether for consumption, warehousing, or admission as defined in21

this Act;22

(aa) Freight Forwarder refers to a local entity that acts as a cargo intermediary23

and facilitates transport of goods on behalf of its client without assuming the role of a24

carrier, which can also perform other forwarding services, such as booking cargo25

space, negotiating freight rates, preparing documents, advancing freight payments,26

providing packing/crating, trucking and warehousing, engaging as an27

agent/representative of a foreign non-vessel operating as a common carrier/cargo28


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consolidator named in a master bill of lading as consignee of a consolidated shipment,1

and other related undertakings; 2

(bb) International freight forwarder refers to persons responsible for the3

assembly and consolidation of shipments into single lot, and assuming, in most cases,4

the full responsibility for the international transport of such shipment from point of5

receipt to the point of destination;6

(cc) Jurisdictional Control refers to the power and rights of the Bureau of7

Customs in exercising supervision and police authority over all seas within the8

jurisdiction of the Philippine territory and over all coasts, ports, airports, harbors, bays,9

rivers and inland waters whether navigable or not from the sea;10

(dd) Lodgement refers to the registration of a goods declaration with the Bureau; 11

(ee) Non-Vessel Operating Common Carrier (NVOCC) refers to an entity, which12

may or may not own or operate a vessel that provides a point-to-point service which13

may include several modes of transport and/or undertakes group age of less container14

load (LCL) shipments and issues the corresponding transport document;15

(ff) Outright Smuggling refers to an act of importing goods into the country16

without complete customs prescribed importation documents, or without being cleared17

by customs or other regulatory government agencies, for the purpose of evading18

payment of prescribed taxes, duties and other government charges;19

(gg) Perishable Good refers to goods liable to perish or goods that depreciate20

greatly in value while stored or which cannot be kept without great disproportionate21

expense, which may be proceeded to, advertised and sold at auction upon notice if22

deemed reasonable; 23

(hh) Port of Entry refers to a domestic port open to both domestic and24

international trade, including principal ports of entry and subports of entry. A principal25

port of entry is the chief port of entry of the Customs District wherein it is situated and is26

the permanent station of the District Collector of such port. Subports of entry are under27

the administrative jurisdiction of the District Collector of the principal port of entry of the28

Customs District. Port of entry as used in this Act shall include airport of entry;29


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(ii) Port of Discharge, also called port of unloading, refers to a place where a1

vessel, ship, aircraft or train unloads its shipments, from where they will be dispatched2

to their respective consignees;3

(jj) Re-exportation means exportation of goods which have been imported;4

(kk) Release of Goods refers to the action by the Bureau to permit goods5

undergoing clearance to be placed at the disposal of the party concerned;6

(ll) Refund refers to the return, in whole or in part, of duties and taxes paid on7

goods;8

(mm) Security refers to any form of guaranty, such as a surety bond, cash bond,9

standby letter of credit or irrevocable letter of credit, which ensures the satisfaction of10

an obligation to the Bureau; 11

(nn) Smuggling refers to the fraudulent act of importing any goods into the12

Philippines, or the act of assisting in receiving, concealing, buying, selling, disposing or13

transporting such goods, with full knowledge that the same has been fraudulently14

imported, or the fraudulent exportation of goods. Goods referred to under this definition15

shall be known as smuggled goods;16

(oo) Taxes refer to all taxes, fees and charges imposed under this Act and the17

National Internal Revenue Code (NIRC), as amended, and collected by the Bureau;18

(pp) Technical Smuggling refers to the act of importing goods into the country by19

means of fraudulent, falsified or erroneous declaration of the goods to its nature, kind,20

quality, quantity or weight, for the purpose of reducing or avoiding payment of21

prescribed taxes, duties and other charges;22

(qq) Tentative Release refers to a case where the assessment is disputed and23

pending review, an importer may put up a cash bond equivalent to the duties and taxes24

due on goods before the importer can obtain the release of said goods;25

(rr) Transit refers to the customs procedure under which goods, in its original26

form, are transported under customs control from one customs office to another, or to a27

free zone;28


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(ss) Transshipment refers to the customs procedure under which goods are1

transferred under customs control from the importing means of transport to the2

exporting means of transport within the area of one Customs office, which is the office3

of both importation and exportation;4

(tt) Travelers refers to any person who temporarily enters the territory of a5

country in which he or she does not normally resides (non-resident), or who leaves that6

territory, and any person who leaves the territory of a country in which he or she7

normally resides (departing resident) or who returns to that territory (returning resident);8

and9

(uu)Third party refers to any person who deals directly with the Bureau, for and10

on behalf of another person, relating to the importation, exportation, movement or11

storage of goods.12

SEC. 103. When Importat ion Begins and Deemed Terminated . –13

Importation begins when the carrying vessel or aircraft enters the Philippine territory14

with the intention to unload therein. Importation is deemed terminated when:15

(a) the duties, taxes and other charges due upon the goods have been paid or16

secured to be paid at the port of entry unless the goods are free from duties, taxes and17

other charges and legal permit for withdrawal has been granted; or18

(b) in case the goods are deemed free of duties, taxes and other charges, the19

goods have legally left the jurisdiction of the Bureau.20

SEC. 104. When Duty and Tax is Due on Imported Goo ds . – Except as21

otherwise provided for in this Act or in other laws, all goods, when imported into the22

Philippines, shall be subject to duty upon importation, including goods previously23

exported from the Philippines.24

Unpaid duties, taxes and other charges, shall incur legal interest of twenty25

percent (20%) per annum computed from the date of final assessment under Section26

429 of this Act, when payment becomes due and demandable. The legal interest shall27

likewise accrue on any fine or penalty imposed.28


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Upon payment of the duties, taxes and other charges, the Bureau shall issue the1

necessary receipt or document as proof of such payment.2

SEC. 105. Effective Date of Rate of Impo rt Duty . – Imported goods shall be3

subject to the import duty rates under the applicable tariff heading that are effective at4

the date of importation or upon withdrawal from the warehouse for consumption. In case5

of withdrawal from free zones for introduction to the customs territory, the duty rate at6

the time of withdrawal shall be applicable on the goods originally admitted, whether7

withdrawn in its original or advanced form.8

In case of goods sold at customs public auction, the duty rates at the date of the9

auction shall apply for purposes of implementing Section 1143(a).10

SEC. 106. Declaran t . – A declarant may be a consignee or a person who has11

the right to dispose of the goods. The declarant shall lodge a goods declaration with the12

Bureau and may be:13

(a) the importer, being the holder of the bill of lading; or14

(b) the exporter, being the owner of the goods to be shipped out; or15

(c) a customs broker acting under the authority of the importer or from a holder of16

the bill; or17

(d) A person duly empowered to act as agent or attorney-in-fact for each holder.18

In case the consignee or the person who has the right to dispose of the goods is19

a juridical person, it may authorize a responsible officer of the company to sign the20

goods declaration as declarant in its behalf.21

The goods declarations submitted to the Bureau shall be processed by the22

declarant or by a licensed customs broker: Provided, That for importations, a transition23

period of two (2) years from the effectivity of this Act is hereby provided during which24

subparagraph (d) of this section shall not be implemented by the Bureau: Provided,25

further, That after two (2) years from the effectivity of this Act, subparagraph (d) of this26

section shall take into effect consistent with international standards and customs best27

practices.28


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SEC. 107. Rights and Responsibi l i t ies o f the Declarant . – The declarant shall1

be responsible for the accuracy of the goods declaration and for the payment of all2

duties, taxes, and other charges due on the imported goods. The licensed customs3

broker shall likewise be responsible for the accuracy of the goods declaration but shall4

not be responsible for the payment of duties, taxes and other charges due on the5

imported goods.6

The declarant shall sign the goods declaration, even when assisted by a licensed7

customs broker, who shall likewise sign the goods declaration.8

SEC. 108. Penalt ies for Errors in Goods Declaration . – The Bureau shall9

not impose substantial penalties for errors when such errors are inadvertent and there10

was no fraudulent intent or gross negligence in the commission thereof: Provided, That,11

in order to discourage repetition of such errors, a penalty may be imposed but shall not12

be excessive.13

SEC. 109. Appl icat ion of Informat ion and Commu nicat ions Techno logy . – In14

accordance with international standards, the Bureau shall utilize information and15

communications technology to enhance customs control and to support a cost-effective16

and efficient customs operations geared towards a paperless customs environment.17

The Bureau shall communicate, exchange and process trade- and logistics-18

related information in the national and regional level for the efficient and prompt19

clearance of goods and commodities in a technology-neutral and secured infrastructure20

for business, industries, and government.21

The security of data and communication shall be in a manner that is consistent22

with applicable local and internationally accepted standards on information security.23

The Bureau shall likewise include as part of its systems and processes, a24

disaster preparedness and recovery plan to ensure business continuity by maintaining25

its uptime goal for its electronic and online services.26

For purposes of customs procedures, electronic documents, permits, licenses or27

certificates shall be acceptable and shall have the legal effect, validity or enforceability28


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as any other document or legal writing: Provided , That when the prescribed1

requirements are duly complied with, the Bureau shall:2

(a) recognize the authenticity and reliability of electronic documents;3

(b) transmit approval in the form of electronic data messages or electronic4

documents; and5

(c) require and/or accept payments and issue receipts acknowledging such6

payments through systems using electronic date messages or electronic documents.7

The introduction and implementation of information and communications8

technology shall be undertaken with due consultation with directly affected parties and9

stakeholders.10

SEC. 110. Relat ion ship Between the Bu reau and Third Part ies . – Parties may11

transact business with the Bureau either directly or through a designated third party to12

act on their behalf.13

The customs transactions directly transacted by a party shall not be treated less14

favorably or be subject to more stringent requirements than those transacted through a15

designated third party.16

A designated third party shall have the same rights and obligations as the17

designating party when transacting business with the Bureau.18

Subject to the provisions of existing laws, treaties, convention and international19

agreements, the Secretary of Finance shall make the necessary guidelines for the20

defined relationship of the Bureau and third parties.21

SEC. 111. Info rmat ion o f General App l ication . – All laws, decisions, rulings,22

circulars, memoranda and orders of the Bureau shall be published in accordance with23

law.24

To foster an informed compliance regime, the Bureau shall ensure that all25

relevant and available information of general application pertaining to customs26

operations and procedures which are not confidential or intended for the Bureau’s27

internal use only, shall be readily accessible to any interested person.28


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Any new information, amendment or changes in customs law, administrative1

procedures or requirements, shall, as far as practicable, be made readily available prior2

to its effective date of implementation unless advance notice is precluded.3

SEC. 112. Inform at ion o f a Speci f ic Nature . – The Bureau shall provide4

information, not otherwise confidential or for the Bureau’s internal use only, relating to a5

specific matter as may be requested by an interested party for legitimate use.6

The Bureau may require the payment of a reasonable fee in providing such7

information. The requested information shall be released within reasonable time from8

the filing of the request and payment of the required fee.9

SEC. 113. Decis ion and Rul ing . – The Bureau shall, consistent with Section10

1502 of this Act, issue binding and advance decision and ruling at the request of an11

interested party on matters pertaining to importation or exportation of goods.12

Upon written request of the interested party, the Bureau shall notify the party of13

its decision in writing within the period specified in this Act or by regulation. Should the14

decision be adverse to the requesting interested party, the reasons thereof shall be15

indicated and the party shall be advised of the party’s right of appeal. 16

The ruling and decision shall be issued by the Bureau within thirty (30) days from17

the submission of the necessary documents and information.18

SEC. 114. Right of A ppeal , Forms and Grou nd . – Any party adversely19

affected by a decision or omission of the Bureau pertaining to an importation,20

exportation, or any other legal claim shall have the right to appeal within fifteen (15)21

days from receipt of the questioned decision or order.22

An appeal in writing shall be filed within the period prescribed in this Act or by23

regulation and shall specify the grounds thereof.24

The Bureau may allow a reasonable time for the submission of supporting25

evidence to the appeal.26


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CHAPTER 31

TYPES OF IMPORTATION2

SEC. 115. Treatment o f Importat ion . – Imported goods shall be deemed3

“entered” in the Philippines for consumption when the goods declaration is electronically4

lodged, together with any required supporting documents, with the pertinent customs5

office.6

SEC. 116. Free Importat ion and Exportat ion . – Unless otherwise provided by7

law or regulation, all goods may be freely imported into and exported from the8

Philippines without need for import and export permits, clearances or licenses.9

SEC. 117. Regulated Impo rtat ion and Expo rtat ion. – Goods which are subject10

to regulation shall be imported or exported only after securing the necessary goods11

declaration or export declaration, clearances, licenses, and any other requirements,12

prior to importation or exportation. In case of importation, submission of requirements13

after arrival of the goods but prior to release from customs custody, shall be allowed but14

only in cases provided for by governing laws or regulations.15

SEC. 118. Prohibi ted Importat ion and Expo rtat ion . – The importation and16

exportation of the following goods are prohibited:17

(a) Written or printed goods in any form containing any matter advocating or18

inciting treason, rebellion, insurrection, sedition against the government of the19

Philippines, or forcible resistance to any law of the Philippines, or written or printed20

goods containing any threat to take the life of, or inflict bodily harm upon any person in21

the Philippines;22

(b) Goods, instruments, drugs and substances designed, intended or adapted23

for producing unlawful abortion, or any printed matter which advertises, describes or24

gives direct or indirect information where, how or by whom unlawful abortion is25

committed;26

(c) Written or printed goods, negatives or cinematographic film, photographs,27

engravings, lithographs, objects, paintings, drawings or other representation of an28

obscene or immoral character;29


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(d) Any goods manufactured in whole or in part of gold, silver or other precious1

metals or alloys and the stamp, brand or mark does not indicate the actual fineness of2

quality of the metals or alloys;3

(e) Any adulterated or misbranded food or goods for human consumption or any4

adulterated or misbranded drug in violation of relevant laws and regulations;5

(f) Infringing goods as defined under the Intellectual Property Code and related6

laws; and7

(g) All other goods or parts thereof, which importation and exportation are8

explicitly prohibited by law or rules and regulations issued by the competent authority.9

SEC. 119. Restr ic ted Imp ortat ion and Exportat ion. – Except when authorized10

by law or regulation, the importation and exportation of the following restricted goods11

are prohibited:12

(a) Dynamite, gunpowder, ammunitions and other explosives, firearms and13

weapons of war, or parts thereof;14

(b) Roulette wheels, gambling outfits, loaded dice, marked cards, machines,15

apparatus or mechanical devices used in gambling or the distribution of money, cigars,16

cigarettes or other goods when such distribution is dependent on chance, including17

jackpot and pinball machines or similar contrivances, or parts thereof;18

(c) Lottery and sweepstakes tickets, except advertisements thereof and lists of19

drawings therein.20

(d) Marijuana, opium, poppies, coca leaves, heroin or other narcotics or synthetic21

drugs which are or may hereafter be declared habit forming by the President of the22

Philippines, or any compound, manufactured salt, derivative, or preparation thereof,23

except when imported by the government of the Philippines or any person duly24

authorized by the Dangerous Drugs Board, for medicinal purposes;25

(e) Opium pipes or parts thereof, of whatever material; and26

(f) Any other goods whose importation and exportation are restricted.27

The restriction to import or export the above stated goods shall include the28

restriction on their transit.29


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CHAPTER 41

RELIEF CONSIGNMENT2

SEC. 120. Relief Consignment . – Goods such as food, medicine, equipment and3

materials for shelter, donated or leased to government institutions and accredited4

private entities for free distribution to or use of victims of calamities shall be treated and5

entered as relief consignment.6

Upon declaration of a state of calamity, clearance of relief consignment shall be a7

matter of priority and subject to a simplified customs procedure. The Bureau shall8

provide for:9

(a) Lodging of a simplified goods declaration or of a provisional or incomplete10

goods declaration subject to completion of the declaration within a specified period;11

(b) Lodging, registering and checking of the goods declaration and supporting12

documents prior to the arrival of the goods, and their release upon arrival;13

(c) Clearance beyond the designated hours of business or away from customs14

offices and waiver of any corresponding charges; and15

(d) Examination and/or sampling of goods only in exceptional circumstances.16

The Department of Finance (DOF) and the Department of Social Welfare and17

Development (DSWD) shall jointly issue the rules and regulations for the18

implementation of this provision.19

SEC. 121. Duty A nd Tax Treatment . – Relief consignment, as defined in Section20

120, imported during a state of calamity and intended for a specific calamity area for21

the use of the calamity victims therein, shall be exempt from duties and taxes.22

TITLE II23

BUREAU OF CUSTOMS24

CHAPTER 125

GENERAL ADMINISTRATION26

SEC. 200. Chief Officials of the Bureau . – The Bureau shall be headed by a27

Commissioner and shall be assisted by at least four (4) but not more than six (6) Deputy28

Commissioners.29


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The Commissioner shall be appointed by the President of the Philippines.1

The Deputy Commissioners shall also be appointed by the President and at least2

majority of whom shall come from the ranks of the Bureau.3

SEC. 201. Powers and Funct ion s of the Commiss ioner . - The Commissioner4

shall have the following powers and functions:5

(a) Exclusive and original jurisdiction to interpret the provisions of this Act, in6

collaboration with other relevant government agencies, subject to review by the7

Secretary of Finance;8

(b) Exercise any customs power, duties and functions, directly or indirectly;9

(c) Review any action or decision of any customs officer performed pursuant to10

the provisions of this Act;11

(d) Review and decide disputed assessments and other matters related thereto,12

subject to review by the Secretary of Finance and exclusive appellate jurisdiction of the13

Court of Tax Appeals (CTA);14

(e) Delegate the powers vested under this Act to any customs officer with the15

rank equivalent to division chief or higher, except for the following powers and functions:16

i. Promulgation of rules and regulations;17

ii. Issuance, revocation or modification of rulings; and18

iii. Compromise or abatement customs obligations.19

(f) Assignment or reassignment any customs officer subject to the approval of the20

Secretary of Finance: Provided, That District Collectors and other customs officers that21

perform assessment functions shall not remain in the same area of assignment for more22

than three (3) years; and23

(g) Perform all other duties and functions as may be necessary for the effective24

implementation of this Act and other customs related laws.25

SEC. 202. Funct ions o f the Bureau . – The Bureau shall exercise the following26

duties and functions:27

(a) Assessment and collection of customs revenues from imported goods and28

other dues, fees, charges, fines and penalties accruing under this Act;29


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(b) Simplification and harmonization of customs procedures to facilitate1

movement of goods in international trade;2

(c) Border control to prevent entry of smuggled goods;3

(d) Prevention and suppression of smuggling and other customs fraud;4

(e) Facilitation and security of international trade and commerce through an5

informed compliance program;6

(f) Supervision and control over the entrance and clearance of vessels and7

aircraft engaged in foreign commerce;8

(g) Supervision and control over the handling of foreign mails arriving in the9

Philippines for the purpose of collecting revenues and preventing the entry of10

contraband;11

(h) Supervision and control on all import and export cargoes, landed or stored in12

piers, airports, terminal facilities, including container yards and freight stations for the13

protection of government revenue and prevention of entry of contraband;14

(i) Conduct of compensation studies, and development and recommendation to15

the President of a competitive compensation and remuneration system to attract and16

retain highly qualified personnel, while ensuring that the Bureau remains financially17

sound and sustainable.18

(j) Exercise of exclusive original jurisdiction over forfeiture cases under this Act;19

and20

(k) Enforcement of this Act and all other laws, rules and regulations related to21

customs administration.22

SEC. 203. Annu al Repor t of the Commiss ioner . – The Commissioner shall23

submit to the President, the Congress of the Philippines and the National Economic and24

Development Authority (NEDA) an annual report on the performance of the Bureau, on25

or before March 31 of the following year.26

SEC. 204. Promulg at ion o f Rules and Regulat ions . – The Commissioner,27

subject to the approval of the Secretary of Finance, shall promulgate rules and28

regulations for the enforcement of this Act. The Commissioner shall regularly prepare29


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and publish an updated customs manual, and the rules, regulations and decisions of the1

Bureau. The Commissioner shall furnish the Congress of the Philippines, the NEDA2

and the Tariff Commission with electronic copies of department orders, administrative3

orders, circulars, and rules and regulations promulgated pursuant to this Act.4

SEC. 205. Copies of Goo ds Declarat ion . – The Commissioner shall regularly5

furnish the NEDA, the Philippine Statistics Authority (PSA), the Bureau of Internal6

Revenue (BIR) and the Tariff Commission electronic copies of all customs goods7

declaration processed and cleared by the Bureau.8

Upon request, the Tariff Commission shall have access to, and the right to be9

furnished with copies of liquidated goods declaration and other documents supporting10

the goods declaration as finally filed in the Commission on Audit (COA).11

For this purpose, the Bureau shall maintain electronic records of goods12

declaration and other documents supporting the declaration.13

CHAPTER 214

CUSTOMS DISTRICTS AND PORTS OF ENTRY15

SEC. 206. Custom s Distr ic ts . – For administrative purposes, the Philippines16

shall be divided into as many Customs Districts as necessary, the respective limits of17

which may be changed from time to time by the Commissioner, with the approval of the18

Secretary of Finance.19

Each Customs District shall be supervised by one (1) District Collector, assisted20

by as many Deputy District Collectors as may be necessary. The choice of the location21

of a District Office, its business hours and the staffing pattern thereof, shall be based on22

the particular requirements of each district.23

SEC. 207. Ports of Entry . – All ports of entry shall be under the supervision and24

control of a Customs District. A District Collector shall be assigned in the principal ports25

of entry while a Deputy District Collector may be assigned toother types of ports of26

entry.27

The principal ports of entry shall be located in Aparri, San Fernando, Manila,28

Manila International Container Port, Ninoy Aquino International Airport, Subic, Clark,29


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Batangas, Legaspi, Iloilo, Cebu, Tacloban, Surigao, Cagayan de Oro, Zamboanga,1

Davao, Limay and such other ports that may be created pursuant to this Act.2

For the effective enforcement of the Bureau’s functions and without hampering3

business and commercial operations of the ports, sea ports and airport authorities and4

private ports and airport operators shall provide suitable areas for examination and for5

other customs equipment free of charge within a definite period of time, as agreed with6

private port and airport operations, if any.7

SEC. 208. Power of the President to Open and Close Any Port . – Upon the8

recommendation of the Secretary of Finance, the President may open or close any port9

of entry. Upon closure of a port of entry, the existing personnel shall be reassigned by10

the Commissioner, subject to the approval of the Secretary of Finance.11

SEC. 209. Ass ignment of Customs Off icers and Employ ees to Other Dut ies . 12

– The Commissioner, with the approval of the Secretary of Finance, may assign any13

employee of the Bureau to any port, service, division or office of the Bureau within the14

Bureau’s staffing pattern or organizational structure, or be assigned other duties:15

Provided, That such assignment shall not affect the employee’s tenure of office nor16

result in a change of status, demotion in rank and/or salary deduction.17

SEC. 210. Duties of the Distr ict Collector. – The District Collector shall have18

the following duties in their assigned Customs District:19

(1) ensure entry of all imported goods at the customs office;20

(2) prevent importation and exportation of prohibited goods;21

(3) ensure legal compliance of regulated goods and facilitate the flow of22

legitimate trade;23

(4) examine, classify and value imported goods;24

(5) assess and collect duties, taxes and other charges on imported goods;25

(6) hold and dispose imported goods in accordance with this Act;26

(7) prevent smuggling and other customs fraud; and27

(8) perform other necessary duties that may be assigned by the Commissioner28

for the effective implementation of this Act.29


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Subject to the supervision and control of the District Collector, the duties and1

functions of the District Collector may be delegated to the Deputy District Collector. The2

Deputy District Collector assigned to a sub-port shall be under the supervision and3

control of the District Collector of the corresponding principal port.4

SEC. 211. Temporary Succession o f Deputy Distr ic t Col lector to Posi t ion o f5

Act in g Distr ic t Col lector . – In the absence or disability of a District Collector or, in6

case of vacancy, the Deputy District Collector shall temporarily discharge the duties of7

the District Collector. Should there be no Deputy District Collector, the District Collector8

shall designate, in writing, a senior ranking customs officer to temporarily perform the9

duties of the District Collector. In case there are two (2) or more senior ranking customs10

officers with equal length of service, a drawing of lots shall be undertaken. The District11

Collector shall report the designation to the Commissioner within twenty-four (24) hours12

after the designation.13

SEC. 212. Records to be Kept by Customs Off icers . – District Collectors,14

Deputy District Collectors, and customs officers acting in such capacities must maintain15

permanent records of official transactions and turn-over all records and official papers to16

their respective successors or other authorized officials. The records shall be made17

available for inspection by other authorized officials of the Bureau.18

If required, the District Collector shall affix the official dry seal of the Bureau on19

all documents and records requiring authentication.20

SEC. 213. Reports of the Distr ic t Col lector to the Commiss ioner . – The21

District Collector shall report to the Commissioner any probable or initiated litigation22

within the Customs District and shall submit regular monthly reports on all district23

transactions.24

CHAPTER 325

EXERCISE OF POLICE AUTHORITY26

SEC. 214. Persons Exercis ing Pol ice Author i ty . – For the effective27

implementation of this Act, the following persons are authorized to effect search,28

seizure, and arrest:29


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(a) Officials of the Bureau, District Collectors, Deputy District Collectors, police1

officers, agents, inspectors and guards of the Bureau;2

(b) Upon authorization of the Commissioner , officers and members of the Armed3

Forces of the Philippines (AFP) and national law enforcement agencies; and4

(c) Officials of the BIR on all cases falling within the regular performance of their5

duties, when payment of internal revenue taxes is involved.6

All officers authorized by the Commissioner to exercise police authority shall at7

all times coordinate with the Commissioner.8

Goods seized by deputized officers pursuant to this Section shall be physically9

turned-over immediately to the Bureau, unless provided under existing laws, rules and10

regulations.11

For this purpose, mission orders shall clearly indicate the specific name carrying12

out the mission and the tasks to be carried out.13

Subject to the approval of the Secretary of Finance, the Commissioner shall14

define the scope, areas covered, procedures and conditions governing the exercise of15

such police authority including custody and responsibility for the seized goods. The16

rules and regulations to this effect shall be furnished to the concerned government17

agencies and personnel for guidance and compliance.18

All seizures pursuant to this Section must be effected in accordance with the19

provisions on the conduct of seizure proceedings provided for in Chapters 3 and 4 of20

Title XI of this Act.21

SEC. 215. Place Where Au thor i ty May be Exercised . – All persons exercising22

police authority as described in the preceding section shall only exercise powers within23

customs premises as provided for in Sec. 303 of this Act and within the limits of the24

authority granted by the Commissioner.25

Port and airport authorities in all ports of entry shall provide authorized customs26

officers with unhampered access to all premises within their administrative jurisdiction.27

SEC. 216. Exercise of Power of Seizure . – Any person exercising police28

authority under this Act has the power and duty to seize any vessel, aircraft, cargo,29


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goods, animal or any other movable property when the same is subject to forfeiture or1

when they are subject of a fine imposed under this Act.2

SEC. 217. Duty o f Off icer to Disclose Off ic ial Character . – For the proper3

exercise of police authority, any authorized person shall disclose the nature of the4

authority upon being questioned at the time of exercise thereof and shall exhibit the5

corresponding written authority issued by the Commissioner.6

SEC. 218. Au thor i ty to Require Assistance and Inform at ion . – Any person7

exercising police authority may demand the assistance of and request information from8

the Philippine National Police (PNP), AFP and other national law enforcement agency,9

when necessary to effect any search, seizure or arrest. It shall be the duty of any police10

officer and other national law enforcers to give such lawful assistance.11

SEC. 219. Auth or i ty to Enter Propert ies . – Any person exercising police12

authority may at any time enter, pass through, and search any land, enclosure,13

warehouse, store, building or structure not principally used as a dwelling house.14

When a security personnel or any other employee lives in the warehouse, store,15

or any building, structure or enclosure that is used for storage of goods, it shall not be16

considered as a dwelling house for purposes of this Act.17

SEC. 220. Au thor i ty to Search Dwel ling House. – A dwelling house may be18

entered and searched only upon warrant issued by a Judge of a competent court, the19

sworn application thereon showing probable cause and particularly describing the place20

to be searched and the goods to be seized.21

SEC. 221. Auth or i ty to Search Vessels or Aircraf ts and Person s or Good s22

Conveyed Therein . – Any person exercising police authority under this Act may23

board, inspect, search and examine a vessel or aircraft and any container, trunk,24

package, box or envelope found on board, and physically search and examine any25

person thereon. In case of any probable violation of this Act, the person exercising26

police authority may seize the goods, vessel, aircraft, or any part thereof.27


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Such power to search includes removal of any false bottom, partition, bulkhead,1

or any other obstruction for the purpose of uncovering any concealed dutiable or2

forfeitable goods.3

The proceeding herein authorized shall not give rise to any claim for damage4

caused to the goods, vessel or aircraft, unless there is gross negligence or abuse of5

authority in the exercise thereof.6

SEC. 222. Authori ty to Search Vehicles, Other Carr iers, Persons and7

Animals . – Upon reasonable cause, any person exercising police authority may open8

and examine any box, trunk, envelope, or other container for purposes of determining9

the presence of dutiable or prohibited goods. This authority includes the search of10

receptacles used for the transport of human remains and dead animals. Such authority11

likewise includes the power to stop, search and examine any vehicle or carrier, person12

or animals suspected of holding or conveying dutiable or prohibited goods.13

SEC. 223. Auth or i ty to Search Person s Arr iv ing From Foreign Countr ies . – 14

Upon reasonable cause, travelers arriving from foreign countries may be subjected to15

search and detention by the customs officers. The dignity of the person under search16

and detention shall be respected at all times. Female inspectors may be employed for17

the examination and search of persons of their own sex.18

SEC. 224. Power to Inspect and Vis i t . –The Commissioner or any customs19

officer who is authorized in writing by the Commissioner, may demand evidence of20

payment of duties and taxes on imported goods openly for sale or kept in storage. In the21

event that the interested party fails to produce such evidence within fifteen (15) days,22

the goods may be seized and subjected to forfeiture proceedings: Provided, That during23

the proceedings the interested party shall be given the opportunity to prove or show the24

source of the goods and the payment of duties and taxes thereon: Provided, further,25

That when the warrant of seizure has been issued but subsequent documents26

presented evidencing proper payment are found to be authentic and in order, the27

District Collector shall, within fifteen (15) days from the receipt of the motion to quash or28

recall the warrant, shall cause the immediate release of the goods seized, subject to29


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clearance by the Commissioner: Provided, finally, That the release thereof shall not be1

contrary to law.2

TITLE III3

CUSTOMS JURISDICTION AND CUSTOMS CONTROL4

CHAPTER 15

CUSTOMS JURISDICTION6

SEC. 300. Customs Jur isd ic tion . – For the effective implementation of this Act,7

the Bureau shall exercise jurisdiction over all seas within Philippine territory and all8

coasts, ports, airports, harbors, bays, rivers and inland waters whether navigable or not9

from the sea and any means of conveyance.10

The Bureau shall pursue imported goods subject to seizure during its transport11

by land, water and air and shall exercise jurisdiction as may be necessary for the12

effective enforcement of this Act. When a vessel or aircraft becomes subject to seizure13

for violation of this Act, a pursuit of such vessel or aircraft which began within the14

territorial waters or air space may continue beyond the same, and the vessel or aircraft15

may be seized in the high seas or international air space.16

CHAPTER 217

CUSTOMS CONTROL18

SEC. 301. Custom s Control Over Goods . – All goods, including means of19

transport, entering or leaving the customs territory, regardless of whether they are liable20

to duties and taxes, shall be subject to customs control to ensure compliance with this21

Act.22

In the application of customs control, the Bureau shall employ audit-based23

controls and risk management systems, use automation to the fullest extent possible,24

and adopt a compliance measurement strategy to support risk management.25

The Bureau shall seek to cooperate and conclude mutual administrative26

assistance agreements with other customs administrations to enhance customs control.27

The Bureau shall consult, coordinate, and cooperate with other government regulatory28


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agencies, free zones authorities, and the customs stakeholders in general to enhance1

customs control.2

SEC. 302. Enforcement of Port Regulat ion of B ureau of Quarant ine. – 3

Customs officials and employees shall cooperate with the quarantine authorities in the4

enforcement of the port quarantine regulations promulgated by the Bureau of5

Quarantine and shall give effect to the same in so far as connected with matters of6

shipping and navigation.7

SEC. 303. Control Over Premises Used for Custom s Purposes . – The8

Bureau shall, for customs purposes, have exclusive control, direction and management9

of customs offices, facilities, warehouses, ports, airports, wharves, infrastructure and10

other premises in the Customs Districts, in all cases without prejudice to the general11

police powers of the local government units (LGUs), the Philippine Coast Guard and of12

law enforcement agencies in the exercise of their respective functions.13

SEC. 304. Power of the President to Subject Premises to Customs14

Jur isdict ion . – When public interest requires, the President may, by executive order,15

declare any public wharf, landing place, infrastructure, street or land, in any port of entry16

under the jurisdiction of the Bureau as may be necessary, for customs purposes and/or17

to authorize a port or terminal operator to transfer overstaying cargoes in an inland18

depot or terminal.19

SEC. 305. Trespass o r Obstruct ion of Customs Premises . – No person shall20

enter or obstruct a customs office, warehouse, port, airport, wharf, or other premises21

under the control of the Bureau without prior authority, including the streets or alleys22

where these facilities are located.23

SEC. 306. Special Survei l lance for th e Protect ion o f Custom s Revenue and24

Prevent ion of Smug gl ing. – The Bureau shall conduct surveillance on vessels or25

aircrafts entering Philippine territory and on imported goods entering the customs office:26

Provided, That the function of the Philippine Coast Guard to prevent and suppress the27

illegal entry of these goods, smuggling and other forms of customs fraud and violations28

of maritime law and its proper surveillance of vessels entering and/or leaving29


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Philippine territory as provided in Republic Act No. 9993, otherwise known as the1

“Philippine Coast Guard Law of 2009” shall continue to be in force.2

SEC. 307. Temporary Storage of Goods . – Subject to the rules and regulations3

to be issued by the Secretary of Finance, the Commissioner shall establish a system for4

temporary storage of imports prior to goods declaration in case of abandoned or5

overstaying goods.6

TITLE IV7

IMPORT CLEARANCE AND FORMALITIES8

CHAPTER 19

GOODS DECLARATION10

SEC. 400. Goods to be Impor ted through Customs Off ice . – All goods11

imported into the Philippines shall be entered through a customs office at a port of12

entry, or may be admitted to or removed from a free zone as defined in this Act, as the13

case may be.14

SEC. 401. Impo rtat ions Subject to Goods Declarat ion . – Unless otherwise15

provided for in this Act, all imported goods shall be subject to the lodgement of a goods16

declaration. A goods declaration may be for consumption, for customs bonded17

warehousing, for admission, for conditional importation, or for customs transit.18

SEC. 402. Goods Declarat ion for Consumpt ion. – All goods declaration for19

consumption shall be cleared through a formal entry process except for the following20

goods which shall be cleared through an informal entry process: 21

(a) Goods of a commercial nature with Free on Board (FOB) or Free Carrier At22

(FCA) value of less than Fifty Thousand Pesos (P50,000.00). Every three (3) years after23

the effectivity of this Act, the Secretary of Finance shall adjust this amount as provided24

herein to its present value, using the Consumer Price Index (CPI) as published by the25

PSA; and26

(b) Personal and household effects or goods, not in commercial quantity,27

imported in a passenger’s baggage or mail. 28


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The Commissioner may adjust the value of goods of commercial nature that shall1

be cleared through an informal entry process without prejudice to the periodic2

adjustment period in subparagraph (a) of this section.3

All importations entered through a formal entry process shall be covered by a4

letter of credit or any verifiable commercial document evidencing payment or in cases5

where there is no sale for export, by any commercial document indicating the6

commercial value of the goods.7

SEC. 403. Provis ional Goo ds Declarat ion . – Where the declarant does not8

have all the information or supporting documents required to complete the goods9

declaration, the lodging of a provisional goods declaration may be allowed: Provided, 10

That it substantially contains the necessary information required by the Bureau and the11

declarant undertakes to complete the information or submit the supporting documents12

within forty-five (45) days from the filing of the provisional goods declaration, which13

period may be extended by the Bureau for another forty-five (45) days for valid reasons.14

If the Bureau accepts a provisional goods declaration, the duty treatment of the15

goods shall not be different from that of goods with complete declaration.16

Goods under a provisional goods declaration may be released upon posting of17

any required security equivalent to the amount ascertained to be the applicable duties18

and taxes.19

SEC. 404. Owner of Imp orted Goods . – All goods imported into the Philippines20

shall be deemed to be the property of the consignee or the holder of the bill of lading,21

airway bill or other equivalent transport document if duly endorsed by the consignee22

therein, or, if consigned to order, duly endorsed by the consignor. The underwriters of23

abandoned goods and the salvors of goods saved from wreck at sea, coast, or any area24

of the Philippines, may be regarded as the consignees.25

SEC. 405. Liabi l i ty of Impo rter for Dut ies and Taxes . – Unless relieved by26

laws or regulations, the liability for duties, taxes, fees, and other charges attached to27

importation constitutes a personal debt due and demandable against the importer in28

favor of the government and shall be discharged only upon payment of duties, taxes,29


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fees, and other charges. It also constitutes a lien on the imported goods which may be1

enforced while such goods are under customs’ custody. 2

SEC. 406. Imp ortat ions by the Government . – Except those provided for in3

Section 800 of this Act, all importations by the government for its own use or that of its4

subordinate branches or instrumentalities, or corporations, agencies or instrumentalities5

owned or controlled by the government, shall be subject to the duties, taxes, fees, and6

other charges under this Act.7

SEC. 407. Good s Declarat ion and Period o f Fi l ing . – As far as practicable,8

the format of the goods declaration shall conform with international standards. The data9

required in the goods declaration shall be limited to such particulars that are deemed10

necessary for the assessment and collection of duties and taxes, the compilation of11

statistics and compliance with this Act. The Bureau shall require the electronic12

lodgement of the goods declaration.13

The Bureau shall only require supporting documents necessary for customs14

control to ensure that all requirements of the law have been complied with. Translation15

of supporting documents shall not be required except when necessary.16

Goods declaration must be lodged within fifteen (15) days from the date of17

discharge of the last package from the vessel or aircraft. The period to file the goods18

declaration may, upon request, be extended on valid grounds for another fifteen (15)19

days: Provided, That the request is made before the expiration of the original period20

within which to file the goods declaration: Provided, however, That the period of the21

lodgement of the goods declaration may be adjusted by the Commissioner.22

SEC. 408. Lod gement and Amendm ent Good s Declarat ion . – The Bureau23

shall permit the electronic lodgement of the goods declaration at any designated24

customs office. The Bureau shall, for valid reason and under terms and conditions25

provided by regulation, permit the declarant to amend the goods declaration that has26

already been lodged: Provided, That the request to amend the goods declaration,27

together with the intended amendments, must be received prior to final assessment or28

examination of the goods.29


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SEC. 409. Adv ance Lodg ement and Clearance . – The Bureau may provide1

for the lodgement and clearance of goods declaration and supporting documents prior2

to the arrival of the goods under such terms and conditions as may be provided by rules3

and regulations to be promulgated under this Act.4

SEC. 410. Entry of Goods in Part for Consumption and in Part for5

Warehousing . – Goods declaration covered by one bill of lading or airway bill over6

goods which are meant in part for consumption and in part for warehousing may be7

both entered simultaneously for release at the port of entry.8

SEC. 411. Contents o f Good s Declarat ion . –

Goods declarations shall contain9

the names of the consignee, importing vessel or aircraft, port of departure, port of10

destination and date of arrival, the number and marks of packages, or the quantity, if in11

bulk, the nature and correct commodity description of the goods contained therein, its12

value as set forth in a proper invoice, and such other information as may be required by13

rules and regulation. Where the declarant does not have all the information required to14

make the goods declaration, a provisional or incomplete goods declaration shall, for15

certain cases and for reasons deemed valid by the Bureau, be allowed to be lodged:16

Provided, That it contains the particulars deemed necessary by the Bureau for the17

acceptance of the entry filed and that the declarant undertakes to complete it within18

forty five (45) days from the filing of the provisional goods declaration in accordance19

with Section 403 of this Act. 20

SEC. 412. Statements to be Provided in the Good s Declarat ion . – No entry21

of imported goods shall be allowed unless the goods declaration has been lodged with22

the Bureau. The goods declaration shall, under penalties of falsification or perjury,23

contain the following statements:24

(a) The invoice and goods declaration contain an accurate and faithful account of25

the prices paid or payable for the goods, and other adjustments to the price actually26

paid or payable, and that nothing has been omitted therefrom or concealed whereby the27

government of the Republic of the Philippines might be defrauded of any part of the28

duties and taxes lawfully due on the goods; and29


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(b) To the best of the declarant’s information and belief, all the invoices and bills1

of lading or airway bills relating to the goods are the only ones in existence relating to2

the importation in question, and that these documents are in the same state as when3

they were received by the declarant, and the declaration thereon are in all respects4

genuine and true.5

Goods declaration shall be submitted electronically pursuant to Republic Act No.6

8792, otherwise known as the “Electronic Commerce Act of 2000”. Such declarations7

when printed and certified by a competent customs officer as a faithful reproduction of8

the electronic submission shall be considered as actionable documents for purposes of9

prosecuting a declarant if the declarations are found to be fraudulent.10

SEC. 413. Descr ipt ion of Goods . – Under such terms and conditions11

prescribed under the rules and regulations, the description of the goods in the goods12

declaration must be sufficient and specific in detail to enable the goods to be identified13

for customs valuation, statistical purposes, and classification to the appropriate tariff14

heading and subheading in the currency of the invoice, and in such other particulars15

necessary for the proper assessment and collection of duties and taxes. The quantity16

and value of each of the several classes of goods shall be separately declared17

according to their respective headings or subheadings and the totals of each heading or18

subheading shall be duly shown.19

SEC. 414. Commercial and Non -Comm ercial Invo ice . – Commercial invoice20

of imported goods shall contain the following:21

(a) the agreed price paid or to be paid for the goods;22

(b) the adjustments to the price paid or to be paid as defined in Section 701 (1) of23

this Act, if not yet included in the invoice, as may be applicable;24

(c) the names of the buyer, seller, and the time and place of sale;25

(d) the port of entry;26

(e) a sufficient description to enable the accurate identification of goods for tariff27

classification, customs valuation, and statistical purposes, indicating the correct28

commodity description, in customary term or commercial designation, the grade or29


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quality, numbers, marks or symbols under which they are sold by the seller or1

manufacturer, together with the marks and number of packages in which the goods are2

packed;3

(f) the quantities in the weights or measures of the goods shipped; and4

(g) any other fact deemed necessary for the proper examination, customs5

valuation, and tariff classification of the goods as may be prescribed by rules and6

regulation.7

To the extent possible, the above requirements shall also apply to goods8

imported but not covered by sale, such as goods on consignment or lease, samples, or9

donations, covered by a consignment, pro forma invoice, or other non-commercial10

invoice.11

SEC. 415. Mode of Payment and Terms o f Trade . – Subject to existing laws12

and rules on foreign currency exchange, the internationally accepted standards and13

practices on the mode of payment or remittance covering import and export14

transactions, including standards developed by international trading bodies such as the15

International Chamber of Commerce (ICC) on trading terms (incoterms) and on16

international letters of credit such as the Uniform Customs and Practice for17

Documentary Credits (UCP), shall be recognized.18

SEC. 416. Examinat ion of Samples . – Customs officers shall see to it that19

representative samples taken during examination shall be properly receipted for and20

retained within a reasonable period of time. The quantity and value of the samples21

taken shall be noted in the specified box of goods declaration or electronic form. Such22

samples shall be duly labeled as will definitely identify them with the importation for23

which they are taken.24

SEC. 417. Forwarding o f Cargo and Remains of Wrecked Vessel or Aircraf t . 25

– When vessels or aircrafts are wrecked within the Philippines, the original owners or26

consignees of the cargo, or by its underwriters, in case of abandonment, may seek27

approval from the Bureau to forward the goods saved from the wreck to the ports of28

destination without going through the customs office in the district in which the goods29


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were cast ashore or unloaded. Upon approval, the goods may be forwarded with1

particular manifests and duly certified by a customs officer in charge of the goods.2

The owner of the vessel or aircraft may be permitted to export the remains of the3

wreck upon proper examination and inspection. The remains of a wrecked vessel shall4

include not only its hull and rigging, but also all sea stores, goods and equipment, such5

as sails, ropes and chain anchors.6

SEC. 418. Derel ic ts and Goo ds from Abando ned Wrecks . – Derelicts and7

all goods recovered from sea or from abandoned wrecks shall be under the jurisdiction8

of the port where the goods arrive, and shall be retained in the custody of the Bureau. If9

not claimed by the owner, underwriter or salvor, the same shall be deemed as property10

of the government.11

When such goods are brought into port by lighters or other craft, each vessel12

shall submit a manifest of their respective cargo.13

The customs officer nearest the scene of the wreck shall take charge of the14

goods saved and shall give immediate notice to the District Collector or the nearest15

customs office.16

In order to prevent any attempt to commit fraud, the District Collector shall be17

represented at the salvage of the cargo by customs officers who shall examine and18

receive the inventory made on the cargo.19

Derelicts and goods salvaged from foreign vessels or aircrafts recovered from20

sea or wreck are prima facie dutiable and may be entered for consumption or21

warehousing. If claimed to be of Philippine production, and consequently conditionally22

duty-free, proof must be submitted as in ordinary cases of re-importation of goods.23

Foreign goods landed from a vessel or aircraft in distress is dutiable if sold or disposed24

of in the Philippines.25

Before any goods taken from a recent wreck are admitted to the customs26

territory, the same shall be appraised, and the owner or importer shall have the same27

right to appeal as in ordinary importation.28


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No part of a Philippine vessel or aircraft or its equipment, wrecked either in1

Philippine or foreign waters, shall be subject to duty. 2

CHAPTER 23

EXAMINATION OF GOODS4

SEC. 419. Examinat ion of Good s . – Examination of goods, when required by5

the Bureau, shall be conducted immediately after the goods declaration has been6

lodged. Priority in the examination shall be given to live animals, perishable goods and7

other goods requiring immediate examination.8

Whenever necessary, a system of coordination and joint examination of goods9

shall be established by the Bureau and other regulatory agencies under existing laws10

and regulations.11

As a general rule, the Bureau may examine the goods in the presence of the12

declarant or an authorized representative. Examination of the goods in the absence of13

the declarant or authorized representative may be allowed in exceptional circumstance14

and for valid and justifiable grounds, as may be defined by regulations promulgated by15

the Secretary of Finance, upon recommendation of the Commissioner. The Bureau may16

require the declarant to be present or to be represented at the examination of the goods17

or to render any assistance necessary to facilitate the examination.18

The Bureau shall take samples of the goods only when needed to establish the19

tariff description and value of goods declared, or to ensure compliance with this Act.20

Samples drawn shall be as minimal as possible.21

SEC. 420. Cond i t ions for Examinat ion . – Pursuant to internationally accepted22

standards, the Bureau may adopt non-intrusive examination of goods, such as the use23

of x-ray machines.24

Physical examination of the goods shall be conducted when:25

(a) it is directed by the Commissioner on account of a derogatory information;26

(b) the goods are subject to an Alert Order issued by competent authority;27

(c) the goods are electronically selected for physical examination;28


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(d) there are issues and controversies surrounding the goods declaration and1

the import clearance process; or2

(e) the importer or declarant requests for the examination of the goods.3

The Commissioner may exempt from physical examination the goods of4

authorized economic operators or of those provided for under any existing trade5

facilitation program of the Bureau.6

Physical examination, when required, shall be conducted in an expeditious7

manner.8

SEC. 421. Duties of Customs Off icer Tasked to Examine the Imported9

Goods . – In the examination, classification, and valuation of the goods, the customs10

officer shall:11

(a) determine whether the packages for examination and their contents are in12

accordance with the goods declaration, invoice and other pertinent documents;13

(b) take samples of the imported goods for examination or laboratory analysis14

when necessary;15

(c) issue a receipt for a sample taken and retained during examination; and16

(d) report whether the goods have been correctly declared as to value, quantity,17

measurement, weight, tariff classification and not imported contrary to law.18

Failure on the part of the customs officer to perform the above duties shall be19

penalized according to Section 1431 of Title XIV of this Act.20

SEC. 422. Custom s Expenses Const i tut ing Charges on Goods . – The cost21

of examination shall be for the account of the importer or exporter, subject to proper22

accounting and documentation. All expenses incurred by the Bureau for the handling or23

storage of goods and other necessary operations shall be chargeable against the24

goods, and shall constitute a lien thereon.25

CHAPTER 326

ASSESSMENT AND RELEASE27

SEC. 423. Determinat ion o f the De Minimis Value . –No duties and taxes shall28

be collected on goods with an FOB or FCA value of Ten Thousand Pesos (P10,000.00)29


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or below. The Secretary of Finance shall adjust the de minimis value as provided1

herein, every three (3) years after the effectivity of this Act. The value herein stated2

shall be adjusted to its present value using the CPI, as published by the PSA.3

SEC. 424. Duty of Custom s Off icer Task to Ass ess Imp orted Goods . – For4

purposes of assessing duties and taxes on imported goods, the customs officer shall5

classify, value, and determine the duties and taxes to be paid. The customs officer shall6

prepare and submit an assessment report as established under this Act.7

SEC. 425. Tentat ive Assessm ent of Good s Subject to Dispu te Sett lement. – 8

Assessment shall be deemed tentative if the duties and taxes initially assessed are9

disputed by the importer. The assessment shall be completed upon final readjustment10

based on the tariff ruling in case of classification dispute, or the final resolution of the11

protest case involving valuation, rules of origin, and other customs issues.12

The District Collector may allow the release of the imported goods under13

tentative assessment upon the posting of sufficient security to cover the applicable14

duties and taxes equivalent to the amount that is disputed.15

SEC. 426. Tentat ive Assessment of Provis ional Goods Declarat ion. – 16

Assessment of a provisional goods declaration shall be deemed tentative and such17

assessment shall be completed upon final readjustment and submission by the18

declarant of the additional information or documentation required to complete the19

declaration within the period provided in Section 403.20

SEC. 427. Readjustm ent of App raisal , Classi f icat ion o r Return. – Such21

appraisal, classification or return, as finally passed upon and approved or modified by22

the District Collector, shall not be altered or modified in any manner, except: 23

(1) Within one year after payment of the duties, upon statement of error in24

conformity with Section 912, as approved by the District Collector;25

(2) Within fifteen (15) days after such payment, upon request for reappraisal or26

reclassification addressed to the Commissioner by the District Collector, if the appraisal27

or classification is deemed to be low;28


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(3) Upon request for reappraisal and/or reclassification, in the form of a timely1

protest addressed to the District Collector by the interested party if the latter should be2

dissatisfied with the appraisal or return; or3

(d) Upon demand by the Commissioner after the completion of compliance audit4

in accordance with the provisions of this Act.5

SEC. 428. Assessment o f Duty on Less Than Entered Value. – Duty shall not6

be assessed in any case upon an amount less than the entered value, unless by7

direction of the Commissioner in cases when the importer certifies at the time of entry8

that the entered value is higher than the dutiable value and that the goods are so entered9

in order to meet increases made by the appraiser in similar cases then pending re-10

appraisement; and the lower assessment shall be allowed only when the importer's11

contention is sustained by a final decision, and shall appear that such action of the12

importer was taken in good faith after due diligence and inquiry.13

SEC. 429. Final Ass essment. – Assessment shall be deemed final fifteen (15)14

days after receipt of the notice of assessment by the importer or consignee. 15

SEC. 430. Period o f Limi tat ion. – In the absence of fraud and when the goods16

have been finally assessed and released, the assessment shall be conclusive upon all17

parties three (3) years from the date of final payment of duties and taxes, or upon18

completion of the post clearance audit.19

SEC. 431. Release of Good s after Payment of Duties and Taxes . – Goods20

declared shall be released when duties and taxes and other lawful charges have been21

paid or secured and all the pertinent laws, rules and regulations have been complied22

with.23

When the Bureau requires laboratory analysis of samples, detailed technical24

documents or expert advice, it may release the goods before the results of such25

examination are known after posting of sufficient security by the declarant.26

SEC. 432. Release of Good s to the Holder of Bi l l of L ading or A irway Bi l l . – 27

Any customs officer who releases goods to the consignee or lawful holder of the bill of28


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Travelers shall be permitted to export goods for commercial purposes, subject to1

compliance with the necessary export formalities and payment of export duties, taxes,2

and charges, if any.3

SEC. 438. Postal Item or Mail . – Postal item or mail shall include letter-post4

and parcels, as described in international practices and agreements, such as the Acts5

of the Universal Postal Union (AUPU), currently in force.6

A simplified procedure shall be used in the clearance of postal item or mail,7

including the collection of the applicable duties and taxes on such items or goods.8

When all the information required by the customs are available in the special9

declaration form for postal items as provided in the AUPU or similar international10

agreements, the special declaration form and supporting documents shall be the goods11

declaration. However, a separate goods declaration shall be required for the following:12

(a) Goods whose value fall within the level that the Commissioner has13

determined to be taxable and thus must be covered by a goods declaration;14

(b) Prohibited and regulated goods;15

(c) Goods the exportation of which must be certified; and16

(d) Imported goods under a customs procedure other than for consumption.17

SEC. 439. Express Shipment . – The Bureau shall provide simplified customs18

procedures based on international standards and customs best practices for air19

shipments considered as time-sensitive and requiring pre-arrival clearance. Express20

shipments of accredited air express cargo operators may be released prior to the21

payment of the duty, tax, and other charges upon posting of a sufficient security.22

SEC. 440. Establ ishment of Ad vance Custom s Clearance and Control23

Program. – The Bureau may establish and implement a voluntary program on advance24

customs clearance and control on containerized cargoes. The details of the voluntary25

advance customs clearance shall be subject to the rules and regulations to be issued by26

the Bureau after conducting the necessary public hearings and consultations with the27

concerned sectors. 28


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TITLE VI1

CUSTOMS TRANSIT AND TRANSSHIPMENT2

CHAPTER 13

CUSTOMS TRANSIT4

SEC. 600. Custom s Transi t in the Customs Terr itory . – Customs transit within5

the customs territory shall be allowed for goods except those intended for consumption,6

to be transported as follows:7

(a) from port of entry to another port of entry as exit point for outright exportation;8

(b) from port of entry to another port of entry or inland customs office;9

(c) from inland customs office to a port of entry as exit point for outright10

exportation; and11

(d) from one port of entry or inland customs office to another port of entry or12

inland customs office.13

A transit permit is required for goods transported under customs transit.14

However, transfer of goods in customs transit from one means of transport to another15

shall be allowed: Provided, That any customs seal or fastening is not broken or16

tampered.17

The party responsible for the compliance of the obligations imposed on customs18

transit shall ensure that the goods are presented intact and in due course at the19

customs office of destination. Failure to comply with the aforementioned obligations or20

likewise failure to follow a prescribed itinerary or period for delivery of the goods may21

immediately subject the goods to the corresponding duties, taxes, and other applicable22

fines, penalties, and surcharges.23

SEC. 601. Duty and Tax on Good s Intended for Transi t . – Transit goods24

admitted for storage in a customs bonded warehouse, or for outright exportation at the25

port of destination or inland customs office, and goods intended for transit covered by26

Republic Act No. 10668, otherwise known as “An Act Allowing Foreign Vessels to27

Transport and Co-Load Foreign Cargoes for Domestic Transshipment and for Other28


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Purposes”, shall not be subject to the payment of duties and taxes at the port of entry:1

Provided, That any conditions and security required by the Bureau are complied with.2

Goods for consumption and other goods intended for customs transit not covered3

by the immediately preceding paragraph shall be subject to the payment of duties and4

taxes at the port of discharge.5

SEC. 602. Carrier’s Security . – Carriers that transport imported goods that shall6

be placed under customs transit from a port of entry to other ports, shall post a general7

transportation security, amounting to at least Fifty Thousand Pesos (P50,000.00). Such8

security shall ensure the complete and immediate delivery of goods to the customs9

officer at the port of destination and the payment of pertinent customs charges and10

expenses and other transfer costs. The amount of the security may be adjusted by the11

Commissioner, upon approval of the Secretary of Finance.12

CHAPTER 213

CUSTOMS TRANSSHIPMENT 14

SEC. 603. Customs Transshipment . – Goods admitted for tr

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