1.

 GOODS  DECLARATION  FOR  CONSUMPTION   After   payment   of   duties   and   taxes,   the   importer  
  will   then   have   a   non-­‐extendible   period   of   30  
All   imported   goods   will   be   subject   to   the   days  (previously,  15  days  from  posting  of  notice  
lodgment   of   a   goods   declaration   (commonly   to   claim)   to   claim   the   goods   from   customs  
known   as   entry   declaration),   which   may   be   for   custody.  
consumption,  for  warehousing,  for  admission,  for    
conditional   importation   or   for   customs   transit,   If,   at   the   time   of   importation,   an   importer   does  
depending  on  the  purpose.   not   have   all   the   information   or   supporting  
  documents   required   to   complete   a   goods  
As   a   general   rule,   goods   declarations   for   declaration,  the  CMTA  now  allows  the  lodging  of  
consumption  are  cleared  though  a  “formal  entry”   a   provisional   goods   declaration   (PGD).   The   PGD  
process,  except  in  the  following  instances  where   is   a   new   concept   that   importers   can   use  
goods   may   be   cleared   through   “informal   entry”:   particularly   in   instances   where   additional  
(i)   goods   of   a   commercial   nature   with   Free   on   information   and/or   collateral   documents   are  
Board   or   Free   Carrier   Arrangement   (FCA)   value   required   to   be   submitted   at   the   border.   Under  
of   less   than   Php   50,000   (which   is   an   increase   this  concept,  an  importer  would  have  to  execute  
from   the   previous   thresholds   of   Php   2,000   per   an   undertaking   to   complete   the   necessary  
TCCP,  as  amended,  and  USD  500  under  Customs   information  or  submit  the  supporting  documents  
Memorandum   Order   No.   13-­‐2010);   or   (ii)   within  45  days  (extendible  for  another  45  days)  
personal   or   household   effects   or   goods,   not   in   from   the   lodging   of   the   PGD.   Goods   under   PGD  
commercial   quantity,   imported   in   passenger’s   may   be   released   upon   posting   of   a   security  
baggage  or  mail.   equivalent   to   the   amount   ascertained   to   be   the  
  applicable  duties  and  taxes.  
A   goods   declaration   must   now   be   lodged   within    
15   days   (previously,   30-­‐day   non-­‐extendible   An  assessment  by  the  BoC  at  the  border  of  a  PGD  
period)   from   a   BoC   notice   (sent   through   shall  be  deemed  tentative  and  shall  be  completed  
electronic   or   personal   service)   informing   the   upon   final   readjustment   and   submission   of   the  
importers   of   the   date   of   discharge   of   the   last   additional   information   or   documentation  
package   from   the   vessel   or   aircraft,   extendible   required  to  complete  the  declaration.  
for   another   15   days   (upon   request   by   the    
importer   based   on   valid   grounds).   Once   lodged,   If   an   importer   needs   to   amend   a   goods  
the  BoC,  after  its  examination,  shall  issue  a  notice   declaration   already   filed,   the   CTMA,   for   valid  
of  assessment  (of  duties  and  taxes  payable).  The   reasons   and   with   the   approval   of   the   BoC,   also  
importer  has  a  period  of  15  days  from  receipt  of   permits   the   filing   of   an   amended   goods  
said   notice   within   which   to   pay   the   declaration.   The   amendment,   however,   must   be  
corresponding   duties   and   taxes.   In   effect,   this   is   done  prior  to  final  assessment  or  examination  of  
also   the   period   within   which   the   importer   may   the  goods  by  the  BoC.  
contest  the  assessment  issued  by  the  BoC  at  the    
border.   Otherwise,   the   assessment   will   be   In  the  second  part  of  this  article,  we  shall  discuss  
deemed  final  after  the  lapse  of  the  15-­‐day  period.   more   of   the   changes   introduced   under   CMTA,  
  particularly   the   new   rules   on   relief   importations,  
The  failure  to  pay  duties  and  taxes  within  the  15-­‐ the  increase  in  the  threshold  value  of  an  informal  
day  period  shall  result  in  the  imposition  of  a  10%   goods  declaration  as  well  as  those  considered  as  
surcharge   (increased   to   25%   if   delinquency   lasts   small  value  importations.  
for   more   than   one   year)   based   on   the   total    
assessed  amount  or  balance  thereon  as  well  as  to   2.  DE  MINIMIS  IMPORTATIONS  
a   20%   interest   per   annum   computed   from   the    
date  of  final  assessment.   The   CMTA   acknowledges   the   e-­‐commerce   trend  
  of   increasing   number   of   small   value  
consignments   and   thus,   retained   the   provision  
  1  
on  de  minimis  values  (small  value  importations)    
below  which  no  duties  and  taxes  will  be  collected   One   of   the   more   well-­‐known   privileges  
and   with   minimal   clearance   procedures,   recognized   under   Section   800   is   the   duty   and  
including  data  requirements.   tax-­‐free   importation   of   personal   and   household  
  effects   by   “returning   residents”   which   has   been  
The   de   minimis   threshold   value   has   now   been   defined  as  nationals  who  have  stayed  in  a  foreign  
increased   to   Php10,000   (previously,   Php10)   in   country  for  a  period  of  at  least  six  months.  
response   to   the   clamor   of   foreign   business    
groups.  Thus,  if  the  value  of  an  importation  does   The   conditions   for   exemption   (aside   from   the  
not   exceed   Ph10,000,   there   will   be   no   duties   and   requirements  that  the  same  should  neither  be  of  
taxes  that  will  be  collectible  by  the  BoC.   commercial   quantity   nor   intended   for   barter,  
  sale  or  hire)  are  as  follows:  
This   threshold   value   is   subject   to   review   by   the    
Finance  Secretary  every  three  years.   ·  For  those  who  have  stayed  in  a  foreign  country  
  for   a   period   of   at   least   10   years,   the   Free   on  
3.  RELIEF  CONSIGNMENT   Board  (FoB)  or  Free  Carrier  Arrangement  (FCA)  
  value   shall   not   exceed   P350,000   and   that   the  
Goods   such   as   food,   medicine,   equipment   and   privilege   is   not   availed   of   within   10   years   prior  
materials   for   shelter,   donated   or   lease   to   to  the  returning  resident’s  arrival.  
government   institutions   and   accredited   private    
entities  for  free  distribution  to  or  use  of  victims   ·  If  the  stay  is  at  least  five  years,  the  FCA  or  FOB  
of   calamities   shall   be   treated   as   relief   value   shall   not   exceed   P250,000   and   that   the  
consignment.   Relief   goods   are   exempt   from   privilege  is  not  availed  of  within  five  years  prior  
duties  and  taxes.   to  the  returning  resident’s  arrival.  
   
Upon   declaration   of   a   state   of   calamity,   the   ·  If  the  stay  is  less  than  five  years,  the  FCA  or  FoB  
clearance   of   such   goods   will   be   a   matter   of   value   shall   not   exceed   P150,000   and   that   the  
priority.   privilege  is  not  availed  of  within  six  months  prior  
  to  the  returning  resident’s  arrival.  
Towards   this   end,   restrictions   on   customs    
policies   are   now   relaxed   under   the   CMTA.   In   addition   to   the   above,   returning   Overseas  
Special  procedures  are  now  provided  to  facilitate   Filipino  Workers  (OFWs)  shall  have  the  privilege  
their  unimpeded  entry.  Among  these  procedures   to   bring   in   tax   and   duty   free   home   appliances  
are:   a)   lodging   of   a   simplified   or   provisional   and  other  durables  (limited  to  one  of  every  kind)  
goods   declaration;   b)   pre-­‐arrival   clearance;   c)   once   in   a   given   calendar   year   accompanying  
clearance   beyond   business   hours   without   them   on   their   return   or   arriving   within   a  
corresponding   charges;   and   d)   examination   shall   reasonable   time   (not   exceeding   60   days   after  
be  in  exceptional  cases  only.   every  returning  OFWs  return).  
   
The   Department   of   Finance   (DoF)   and   the   Residents   of   the   Philippines,   OFWs   or   other  
Department   of   Social   Welfare   and   Development   Filipinos,   while   residing   abroad   or   upon   their  
shall  jointly  issue  implementing  rules  on  this.   return   to   the   Philippines,   are   also   allowed   to  
  bring   in   or   send   to   their   families   or   relatives   in  
4.  CONDITIONALLY-­‐FREE  AND  DUTY-­‐EXEMPT   the   Philippines   “balikbayan   boxes”   (containing  
IMPORTATIONS   personal   and   household   effects   only)   duty   and  
  tax-­‐free,   provided   that   the   FCA   value   shall   not  
The   CMTA   introduces   modifications   to   Section   exceed   P150,000   and   the   items   are   not   in  
105   of   the   TCCP,   as   amended,   on   conditionally-­‐ commercial   quantities   or   intended   for   barter,  
free  importations  (now  named  conditionally-­‐free   sale   or   for   hire.   This   can   be   availed   up   to   three  
and  duty-­‐free  importations  under  Section  800).   times  in  a  calendar  year.  
  2  
   ·   Settled   in   accordance   with   normal   pricing  
Any   amount   in   excess   of   the   above   threshold   practices  of  the  industry;  
values   shall,   however,   be   subject   to   duties   and   ·   Settled   in   a   manner   consistent   with   sales   to  
taxes.   unrelated  buyers;  
  ·  Adequate  to  ensure  recovery  of  all  costs  plus  a  
5.  RELATED  PARTY  TRANSACTIONS   profit   equivalent   to   the   firm’s   overall   profit  
  realized   over   a   representative   period   of   time   in  
The   CMTA   upholds   the   hierarchical   application   sales  of  goods  of  the  same  class  or  kind.  
of   the   six   methods   of   valuation   of   imported    
goods,   with   Method   1   or   the   Transaction   Value   Failure   to   establish   either   of   the   above   proofs  
(TV)   of   the   imported   goods   being   the   primary   may   result   in   the   declared   TV   to   be   rejected   for  
method.   The   TV   is   basically   the   “price   paid   or   purposes   of   customs   appraisement   and   the   price  
payable”   for   the   goods   when   sold   for   export   to   will   be   determined   using   other   methods   of  
the   Philippines,   subject   to   certain   adjustments   valuation  in  their  sequential  order.  
such  as  selling  commissions  and  brokerage  fees,    
cost   of   containers,   cost   of   packing,   assists,   6.   MISDECLARATION,   MISCLASSIFICATION,  
royalties   and   license   fees,   cost   of   transport   and   UNDERVALUATION  IN  GOODS  DECLARATION  
insurance,  among  others.    
  The   CMTA   has   increased   the   surcharge   penalty  
Under   the   rules,   one   of   the   limitations   on   the   for   misdeclaration,   misclassification   and  
application  of  the  TV  method  is  that,  in  cases  of  a   undervaluation  of  imported  goods.  
related   party   transaction,   the   price   between   the    
importer   and   its   related   foreign   supplier   should   There   is   misdeclaration   when   the   discrepancy  
not   be   influenced   by   such   a   relationship.   The   pertains  to  quantity,  quality,  description,  weight,  
CMTA   states   that   in   order   to   prove   the   absence   or  measurement  of  the  imported  goods.  
of   such   influence,   the   importer   must   be   able   to    
demonstrate   that   the   declared   value   closely   Misclassification,  on  the  other  hand,  exists  when  
approximates   one   of   the   following   “test   values”   insufficient  or  wrong  description  of  the  goods  or  
occurring  at  or  about  the  same  time:   use   of   wrong   tariff   heading   was   declared  
  resulting  in  a  discrepancy.  
·  The  TV  in  sales  to  unrelated  buyers  of  identical    
or   similar   goods   for   export   to   the   same   country   Undervaluation  is  present  when:  
of  importation;    
·  The  customs  value  of  identical  or  similar  goods   ·   The   declared   value   fails   to   disclose   in   full   the  
as   determined   using   the   Deductive   Value   price   actually   paid   or   payable   or   any   dutiable  
Method;  and   adjustment  to  the  price;  or  
·  The  customs  value  of  identical  or  similar  goods   ·  When  an  incorrect  valuation  method  is  used;  or  
as   determined   using   the   Computed   Value   ·  The  valuation  rules  are  not  properly  observed.  
Method.    
  Any   misdeclaration,   misclassification   or  
Aside   from   the   application   of   test   values,   the   undervaluation  of  imported  goods  resulting  in  a  
WTO   agreement   also   recognizes   the   discrepancy  (in  duty  and  tax  to  be  paid)  between  
“circumstances   of   sale   analysis”   as   a   remedy   in   what  is  legally  determined  upon  assessment  and  
proving   the   absence   of   such   influence.   This   what   is   declared   will   be   subject   to   a   fixed  
remedy,   which   is   likewise   embodied   under   surcharge   rate   of   250%   of   the   duty   and   tax   due  
Customs   Administrative   Order   (CAO)   No.   4-­‐2004   (previously,  100%  to  200%  of  the  duty  due).  
and  Customs  Memorandum  Order  (CMO)  No.  16-­‐  
2010,   involves   showing   the   arm’s   length   nature   Surcharge,  however,  will  not  be  imposed  when:  
of  the  transaction  by  proving  that  the  price  was:    
  ·  The  discrepancy  in  duty  is  less  than  10%;  or  
  3  
·   The   importer’s   declared   value   and/or   tariff   means   of   a   fraudulent,   falsified   or   erroneous  
heading/classification:   declaration   of   the   goods   as   to   its   nature,   kind,  
·  Relied  on  an  official  government  ruling;  or   quality,   quantity   or   weight.   In   other   words,  
·   Is   rejected   in   a   formal   customs   dispute   technical   smuggling   takes   place   through  
settlement   process   involving   difficult   or   highly   undervaluation,   misclassification   or  
technical  questions  relating  to  the  application  of   underdeclaration  of  the  goods  shipped.  
customs   valuation   rules   and/or   tariff    
classifications.   The   difference   between   outright   smuggling   and  
  technical  smuggling  lies  in  the  use  or  non-­‐use  of  
If   the   misdeclaration,   misclassification   or   legal   trade   channels   when   bringing   the   goods  
undervaluation  is  intentional  or  fraudulent  (such   into   the   country.   Outright   smuggling   bypasses  
as  when  a  false  or  altered  document  is  submitted   the   usual   and   normal   procedure   and   process   of  
or   when   false   statements   or   information   are   clearing   the   cargo   at   the   BoC,   while   technical  
knowingly  made),  a  500%  surcharge  (of  the  duty   smuggling   involves   fraudulent   acts   during   the  
and   tax   due)   will   be   imposed   on   the   importer   processing   and   releasing   of   the   goods.   In   both  
and   to   those   who   willfully   participated   in   the   instances,   however,   the   ultimate   objective   is   to  
fraudulent   act.   The   imported   goods   will   be   evade   the   payment   of   the   prescribed   taxes,  
subject  to  seizure  regardless  of  the  amount  of  the   duties  and  other  charges.  
discrepancy.    
  The   penalty   is   imprisonment   or   a   fine   which  
The   CMTA   likewise   adopts   the   previous   rule   ranges   from   Php   25,000   to   Php   50,0000,000  
under  the  TCCP,  as  amended,  on  the  existence  of   depending  on  the  value  (up  to  Php  200,000,000)  
a  prima  facie  evidence  of  fraud  if  the  discrepancy   of   the   goods   unlawfully   imported,   including  
(in   duty   and   tax   to   be   paid)   amounts   to   more   duties  and  taxes.  If  the  value  (or  aggregate  value)  
than  30%.   exceeds   Php   200,000,000,   the   same   shall   be  
  deemed   as   a   heinous   crime   punishable   with   a  
7.   UNLAWFUL   IMPORTATION   OR   penalty   of   reclusion   perpetua   (imprisonment   of  
EXPORTATION   20  years  and  1  day  to  40  years)  and  a  fine  of  not  
  less  than  Php  50,000,000.  
The   CMTA   provides   stiffer   penalties   for    
smuggling   (which   can   either   be   outright   or   Each   act   of   unlawful   importation   or   exportation  
technical)   which   has   been   defined   as   the   shall  be  deemed  a  separate  offense.  
fraudulent   act   of   importing   any   goods   into   the    
Philippines,   or   the   act   of   assisting   in   receiving,   In   the   fourth   part   of   this   article,   we   will   discuss  
concealing,   buying,   selling,   disposing   or   other   changes   introduced   under   the   CMTA,  
transporting   such   goods,   with   full   knowledge   particularly   the   new   rules   relating   to  
that  the  same  has  been  fraudulently  imported.  It   abandonment,   period   of   storage   in   a   Customs  
likewise   includes   the   exportation   of   goods   in   any   Bonded   Warehouse,   advance   customs   rulings,  
manner  contrary  to  law.   post   clearance   audit,   record   keeping  
  requirements  and  penalties.  
Outright   smuggling   refers   to   the   act   of   importing    
goods   into   the   country   without   complete   8.  ABANDONMENT  RULES  
customs-­‐prescribed   importation   documents,   or    
without   being   cleared   by   customs   or   other   The   abandonment   of   imported   goods   can   either  
regulatory   government   agencies.   In   this   case,   be  express  or  implied.  
imported   goods   are   not   registered   at   all   with   the    
BoC  or  other  government  agencies.   An   express   abandonment   occurs   when   an  
  importer   expressly   signifies   in   writing   to   the  
Technical  smuggling,  on  the  other  hand,  refers  to   District  Collector  of  his  intention  to  abandon  the  
the   act   of   importing   goods   into   the   country   by   imported   goods.   In   such   case,   the   goods   shall  
  4  
ipso   facto   be   deemed   property   of   the    
Government   and   may   be   sold   or   disposed   of   The   general   rule   under   the   CMTA   is   that   goods  
generally   at   the   port   where   the   goods   are   entered   for   warehousing   may   remain   in   a   CBW  
located.   for   a   fixed   period   of   one   year   from   the   time   of  
  their   arrival,   except   for   perishable   goods   where  
On   the   other   hand,   there   is   implied   the   storage   period   is   three   months   from   the   date  
abandonment,   in   the   following   cases,   among   of  arrival,  extendible  (for  valid  reasons  and  upon  
others:   written   request)   for   another   three   months.   This  
  is  a  departure  from  the  current  rule  which  fixes  
·   When   an   importer   fails   to   file   the   goods   the   storage   period   in   a   CBW   to   a   maximum   one  
declaration  within  15  days  (previously,  a  30-­‐day   year  period,  regardless  of  whether  the  goods  are  
non-­‐extendible   period)   or   within   the   approved   perishable  or  not.  Goods  not  withdrawn  after  the  
extended  period  of  another  15  days  from  notice   expiration   of   the   prescribed   period   shall   be  
of  the  date  of  discharge  of  the  last  package  from   deemed  abandoned.  
the  vessel  or  aircraft;    
·   Having   filed   such   a   declaration,   the   importer   The  BoC  Commissioner,  in  consultation  with  the  
fails  to  pay  the  assessed  duties  and  taxes  within   Secretary   of   Trade   and   Industry,   shall   also  
15   days   from   receipt   of   notice   of   final   establish   reasonable   storage   period   limits  
assessment;   beyond   the   general   one-­‐year   period   for   bonded  
·   Failure   to   claim   the   goods   within   30   days   goods,   the   processing   into   finished   goods   of  
(previously,   15   days)   from   payment   of   duties   which  require  a  longer  period  based  on  industry  
and  taxes.   standards  and  practice,  subject  to  the  approval  of  
  the  Secretary  of  Finance.  
If  the  BoC  has  not  disposed  of  the  goods  implied    
to  be  abandoned,  the  owner  or  importer  of  goods   The   unauthorized   withdrawal   of   imported   goods  
may,   within   30   days   after   the   lapse   of   the   from  the  CBW  shall  be  subject  to  a  surcharge  of  
prescribed   period   to   file   the   declaration   (15   50%   of   duties,   taxes,   customs   fees   and   charges,  
days,   extendible   for   another   15   days),   still   found   to   be   due   and   unpaid.   If   the   delinquency  
reclaim   the   goods   by   complying   with   all   legal   lasts  for  more  than  one  year,  the  surcharge  shall  
requirements   and   paying   the   corresponding   be   increased   by   25%   of   the   unpaid   duties   and  
duties,  taxes,  and  other  charges.   taxes  annually.  
   
On  the  other  hand,  if  the  BoC  has  already  sold  the   SELF-­‐CERTIFICATION   SYSTEM   FOR   ORIGIN  
goods,   the   proceeds   of   the   sale,   after   deduction   PURPOSES  
of   any   duty   and   tax   and   all   other   charges   and    
expenses   (such   as,   government   storage   charges;   While  the  BoC  may  (upon  request)  determine  the  
expenses   for   the   appraisal,   advertisement,   and   Philippine   origin   of   goods   for   export   through   the  
sale   of   auctioned   goods;   arrastre   and   private   issuance   of   certificates   of   origin,   the   CMTA,   in  
storage   charges   and   demurrage   charges;   and   preparation   for   the   ASEAN-­‐wide   implementation  
freight,   lighterage   or   general   average,   on   the   of   the   self-­‐certification   system,   allows   exporters  
voyage   of   importation)   shall   be   turned   over   to   (producers   or   manufacturers   of   goods)   duly  
those   persons   entitled   to   receive   them.   The   accredited   by   the   BoC   to   perform   a   “self-­‐
balance   will   then   be   deposited   to   a   “forfeiture   certification”  procedure  as  an  alternative  means  
fund”   to   be   managed   by   the   BoC   which   shall   be   of   proving   the   Philippine   origin   of   goods   for  
used   to,   among   others,   support   its   export.  
modernization   program   and   other   operational    
efficiency  and  trade  facilitation  initiatives.   The   introduction   of   a   self-­‐certification  
  arrangement   (in   establishing   the   origin   of  
9.   PERIOD   OF   STORAGE   IN   A   CUSTOMS   Goods)   plays   a   critical   role   in   achieving   a   free  
BONDED  WAREHOUSE  (CBW)   flow   of   goods   within   the   ASEAN   single   market   as  
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it   is   aimed   at   facilitating   the   utilization   of   Free   within  three  years  from  the  date  of  final  payment  
Trade   Agreements   (FTAs).   The   system   of   duties   and   taxes   or   customs   clearance,   as   the  
effectively   eliminates   the   need   to   present   a   case   may   be.   In   the   absence   of   any   specific  
Certificate   of   Origin   (CO)   to   claim   preference   regulation,   this   provision   of   the   CMTA   can   be  
under   FTAs   as   it   allows   accredited   exporters   to   seen   as   a   departure   from   Executive   Order   155  
self-­‐declare  that  their  products  have  satisfied  the   (which   placed   the   audit   function   with   the  
ASEAN   origin   criteria   by   simply   affixing   a   Department   of   Finance’s   (DoF)   Fiscal  
declaration  on  the  commercial  invoice.   Intelligence  Unit)  as  well  as  the  audit  guidelines  
  under  DoF  Department  Order  (DO)  Nos.  11-­‐2014  
This  new  system  seeks  to  reduce  compliances  of   and  44-­‐2014.  
exporters   and   administrative   cost   associated    
with   CO   application.   It   likewise   facilitates   the   The   penalties   for   failure   to   pay   correct   duties  
release   of   shipments   availing   of   preferential   and   taxes   on   imported   goods,   as   may   be   found  
tariff  under  FTAs.   during  post-­‐clearance  audit,  are  now  categorized  
  into  two  degrees  of  culpability,  as  follows:  
10.  ADVANCE  CUSTOMS  RULINGS    
  This  is  a  departure  from  the  previous  degrees  of  
Importers   (and   exporters)   oftentimes   are   faced   penalties;   (a)   negligence   (50%   to   200%   of   the  
with  issues  such  as  whether  certain  payments  to   revenue   loss);   (b)   gross   negligence   (250%   to  
suppliers  are  dutiable  or  not,  whether  an  article   400%   of   the   revenue   loss);   and   (c)   500%   to  
would   fall   under   an   identified   specific   tariff   800%   of   the   revenue   loss   and/or   criminal  
heading   or   another,   or   whether   rules   of   origin   prosecution.  
requirements   to   qualify   for   the   availing   the    
preferential   rates   under   FTAs   are   met.   Furthermore,   under   the   CMTA,   no   substantial  
Potentially,  these  issues  may  lead  to  uncertainty   penalty   shall   be   imposed   on   inadvertent   errors  
in  the  entire  trade  transaction  as  these  will  have   amounting   to   simple   negligence   as   will   be  
an  impact  on  the  amount  of  duties  to  be  paid  and   defined  by  the  implementing  rules.  This  rule  was  
ultimately,  on  the  end  price  of  the  product.   lifted   from   Standard   3.39   of   the   Revised   Kyoto  
  Convention  (RKC)  as  well  as  from  Article  VIII  of  
In   order   to   promote   higher   certainty,   the   World   Trade   Organization/General  
predictability   and   reliability,   the   CMTA   now   Agreement   on   Tariffs   and   Trade   (WTO/GATT),  
adopts   the   Revised   Kyoto   Convention   (RKC)   providing  for  the  non-­‐imposition  of  penalties  for  
provision   on   advance   (binding)   rulings   and   errors   when   such   errors   are   inadvertent   and  
recognizes  the  right  of  importers  and  exporters,   where   there   has   been   no   fraudulent   intent   or  
upon   written   application,   to   seek   advance   gross  negligence.  
rulings   on   classification   from   the   Tariff    
Commission,   and   valuation   as   well   as   rules   of   A   penalty,   which   should   not   be   excessive,   may  
origin   from   the   BoC   Commissioner.   These   however   be   imposed   in   order   to   discourage   a  
rulings,  once  obtained,  should  provide  applicants   repetition  of  such  errors.  
with   more   certainty   on   the   customs   treatment   of    
their  specific  transaction  or  product.   12.  RECORD-­‐KEEPING  REQUIREMENT  
   
Rulings  are  required  to  be  issued  within  30  days   The  CMTA  states  that  all  importers  are  required  
from   receipt   of   the   application   and   supporting   to   keep   relevant   importation   documents,   at   their  
documents  as  may  be  required  by  regulation.   principal  place  of  business,  for  a  period  of  three  
  years   from   the   date   of   final   payment   of   duties  
11.  POST-­‐CLEARANCE  AUDIT   and  taxes  or  customs  clearance,  as  the  case  may  
  be.  This  provision  of  the  CMTA  can  be  seen  as  a  
The   CMTA   states   that   the   Bureau   of   Customs   reversion   to   the   old   rules   and   a   departure   from  
(BoC)   may   conduct   a   “post-­‐clearance   audit”   the  audit  guidelines  under  DoF  DO  Nos.  11-­‐2014,  
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which  set  the  record  retention  period  to  10  years   Cases   involving   forfeiture   of   goods   shall,  
from  the  date  of  importation.   however,  not  be  subject  to  any  compromise.  
   
Economic  zone  locators  are  likewise  required  to   14.   APPLICATION   OF   INFORMATION   AND  
keep  records  of  imported  goods  withdrawn  from   COMMUNICATIONS  TECHNOLOGY  (ICT)  
the  zones  and  brought  into  the  customs  territory.    
  The   BoC,   in   accordance   with   international  
If   an   importer   who,   after   receiving   a   lawful   standards,   is   mandated   under   the   CMTA   to  
demand   in   writing,   fails   or   refuses   to   produce   utilize   ICT   in   enhancing   customs   control   and  
relevant  records,  accounts  or  invoices  necessary   efficiency  in  customs  operations  geared  towards  
to   determine   and   assess   the   correct   value   and   a   paperless   customs   environment.   Electronic  
classification   of   the   imported   goods   at   the   documents,   permits,   licenses   or   certificates   will  
border,  the  CMTA  empowers  a  District  Collector   now  be  acceptable  and  will  have  the  legal  effect,  
to  impose  a  20%  surcharge  based  on  the  dutiable   validity  or  enforceability  as  any  other  document  
value  of  such  goods.   or   legal   writing.   The   utility   of   full   automation  
  will   be   felt   once   the   “Single   Window   Policy”   is  
On  the  other  hand,  if  during  post  clearance  audit,   fully  implemented.  
it   was   determined   that   an   importer   auditee    
failed   to   keep   the   required   records   of   MOVING  FORWARD  
importation,   the   penalty   that   could   be   imposed    
by  the  BoC  is  a  fine  of  P1,000,000  (previously,  a   The   provisions   introduced   under   the   CMTA   are  
fine  of  not  less  than  P100,000  but  not  more  than   basically   trade   facilitation   measures   envisioned  
P200,000)   and/or   imprisonment   of   not   less   than   to   hasten,   simplify,   harmonize   and   clarify  
three   years   and   one   day   but   not   more   than   six   importation   and   exportation   laws,   rules   and  
years  (previously,  imprisonment  of  not  less  than   procedures.   These   changes   provide   an  
two   years   and   one   day   to   six   years).   opportunity  for  the  BoC  to  effectively  implement  
Furthermore,  the  failure  shall  constitute  a  waiver   these   new   rules   towards   achieving   its   primary  
of   the   importer’s   right   to   contest   the   results   of   role   as   a   trade   facilitation   institution.   A  
the  audit  based  on  records  kept  by  the  BoC.   simplified   and   streamlined   trade   procedure  
  could   result   in   higher   volume   of   trade   which   will  
13.   AUTHORITY   OF   THE   COMMISSIONER   TO   positively  impact  on  revenue  collection.  
MAKE  COMPROMISE    
  Importers,   on   the   other   hand,   are   expected   to  
Under   the   CMTA,   the   Commissioner   may,   subject   keep   abreast   of   these   developments   in   order   to  
to  the  further  approval  of  the  Finance  Secretary,   avoid   unnecessary   cost   (in   terms   of   fines,  
compromise   any   administrative   case   involving   surcharges   and   other   penalties)   on   their  
the  imposition  of  fines  and  surcharges,  including   importations  resulting  from  non-­‐compliance.  
those   arising   from   the   conduct   of   a   post  
clearance   audit,   unless   otherwise   specified   by  
law.   Although   not   an   entirely   new   concept,   it  
nevertheless   specifically   mentions   that   the  
compromise   powers   of   the   Commissioner  
include  fines  and  surcharges  arising  from  a  post  
clearance  audit.  This  is  a  welcome  reintroduction  
of   a   voluntary   disclosure   concept   for   importers  
who   would   want   to   correct   their   mistakes   by  
voluntarily   settling   their   deficiencies   in   duties  
and  taxes.  
 

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