IN GENERAL
CUSTOMS LAW does not refer only to the provisions of Tariff and Customs Code. It
also includes other laws and regulations subject to enforcement by the Bureau of
Customs.
Other laws subject to enforcement by the Bureau of Customs:
1. NIRC Sec. 107. Importation of goods or articles subject to VAT. The VAT must be
paid before these goods are released from Customs Custody.
2. NIRC Sec. 131. Importation of Articles subject to excise taxes. The payment of
excise tax must be made before the goods are released from Customs custody.
3. Regulations that may be issued by the CB, the implementation of such regulation is
vested in the Bureau of Customs.
1.
2.
CUSTOMS DUTIES are duties which are charged upon commodities on their being
imported in or exported out of a country.
ARTICLES SUBJECT TO CUSTOMS DUTIES
TARIFF means a book of rates; a table or catalogue drawn usually in alphabetical Goods for customs duty purposes
order containing the names of several states that hold commerce together.
All articles, when imported from any foreign country into the Philippines,
shall be subject to duty upon each importation, even though previously
Scope of tariff and customs laws
exported from the Philippines, except as otherwise specifically provided for
Section 3514 of the Tariff and Customs Code provides that tariff and
in this Code or in other laws [Section 100, Tariff and Customs Code]
customs laws include not only the provisions of the Code itself and
The Code also imposes export tariff and premium duty or certain articles.
regulations pursuant thereto but all other laws and regulations which are
Whether subject to duty or not, all imported articles shall be entered through
subject to enforcement by the Bureau of Customs or otherwise within its
a custom house at the port of entry.
jurisdiction.
Extend not only to the provisions of the Tariff and Customs Code but to all
Articles, goods or merchandise
other laws as well as Central Bank Circulars, the enforcement of which is
Customs duties are duties which are charged upon commodities on their
Administrative Code. The U.S. dollar are merchandise. Checks, as bills of
being imported in or exported out of a country
exchange, are negotiable instruments and may be bought and sold like a
As a general rule, all articles when imported from a foreign country including
quotas, tonnage and wharfage dues, and other duties or imposts within the
those previously exported from the Philippines are subject to duty unless
framework of the national development program of the Government.
otherwise specifically provided in the Code.
Republic Act No. 8181 mandated the change of basis of the dutiable value
reconditioning.
from the home consumption value to the transaction value by January 1,
4. Medals, badges, cups, and other small articles bestowed as trophies or
2000. Before such date, export value was used as the basis for the
prizes or those received or accepted as honorary distinction.
determination of the dutiable value as a transitional device.
5. Personal and household effects belonging to residents of the Philippines
returning from abroad, including jewelry, precious stones and other articles TRANSACTION VALUE
of luxury, which were formally declared and listed before departure.
Transaction value is the price actually paid or payable for the goods when
It is adjusted by adding certain expenses to the extent that they are incurred
EXPORT VALUE
SIMILAR GOODS
Export value is that which, at the time of exportation, the same or identical,
Similar goods mean goods which, although not alike in all respects, have
like or similar article is freely offered for sale in the principal export markets
like characteristics and like component materials which enable them to
of the exporting country for exportation to the Philippines, in the usual
perform the same functions and to be commercially interchangeable.
wholesale quantities and in the ordinary course of trade (excluding internal
excise taxes to be remitted or rebated).
Reasonable doubt
Such condition may include, but is not limited to, any of the following
Procedure for determination of dutiable value
conditions:
1. Determined by the declared value of the imported goods by the importer.
1. If the sale or price is subject to some consideration for which a value cannot
2. If Commissioner of Customs has reason to doubt the truth or accuracy of the
be determined with respect to the goods being valued; or
declaration or documents provided in support of the declared value of
2. If part of the proceeds of any subsequent resale, disposal or use of the
importation, he may require the importer to give further explanation and
goods by the buyer will accrue directly or indirectly to the seller, unless an
submit additional documents.
appropriate adjustment can be made; or
3. If Commissioner still has reasonable doubt as to the accuracy of the
3. If the buyer and the seller are related to one another, and such relationship
declared value after the explanation and additional documents are given, he
influenced the price of the goods.
may apply two alternative methods, to wit:
a.
The dutiable value shall be the transaction value of RELATED SELLERS AND BUYERS
identical goods sold for export to the Philippines at or about the
1. Officers or directors of one anothers businesses.
date of the exportation of the goods being valued; or
2. Legally recognized partners in business.
b.
If the dutiable value cannot be determined under the
3. Employer and employee.
preceding method, it shall be the transaction value of similar goods
4. Any person who directly or indirectly owns, controls or holds 5 % or more of
sold for export to the Philippines at or about the date of exportation
the outstanding voting stock or shares of both seller and buyer.
of the goods being valued.
5. One of them directly or indirectly controls the other.
4. If still not able to determine the dutiable value:
6. Both of them are directly or indirectly controlled by a third person.
a. The unit price at which the imported goods or identical or similar
7. Together, they directly control a third person.
goods are sold domestically, in the same condition as when imported, in
8. Members of the same family including brothers and sisters (whether full or
the greatest aggregate quantity, to persons not related to the seller, at
half-blood), spouse, ancestors, and lineal descendants.
or about the time of the importation of the goods being valued;
b. The computed value; or
Basis for dutiable weight for specific customs duties
c. Any other reasonable means consistent with GATT.
1. Gross weight
2. Legal weight
Reiteration of the sequence in determination of value
3. Net weight
1st - Transaction value
2nd - Transaction value of identical goods
KINDS OF SPECIAL CUSTOMS DUTIES
3rd - Transaction value of similar goods
1. Dumping duty
4th - Deductive value
2. Countervailing duty
5th - Computed value
3. Marking duty
6th - Other reasonable means or fallback value
4. Retaliatory duty or discriminatory duty
5. Duties imposed under the Flexible Tariff Clause
IDENTICAL GOODS
Identical goods mean goods which are the same in all respects, including DUMPING DUTY
Dumping duty duty levied on imported goods where it appears that a specific kind
or class of foreign article being imported into or sold is likely to be sold in the Phils. at
a price less than its fair value.
This represents the inland excise tax on locally manufactured articles of the same
kind to off-set this advantage.
As regards dumping duties, the extent of the special duty is the amount that
represents under-pricing.
As regards countervailing duties, the extent is the excise inland tax or the amount of
advantage enjoyed by that imported article.
COUNTERVAILING DUTY
RETALIATORY DUTY
MARKING DUTY
The articles shall be deemed abandoned upon failure to mark them within 30
Philippines as price lower than the prices in the exporting country.
days from notice.
2. This must prejudice or cause or likely to cause injury to our local industry.
Marking duty duty on ad valorem basis imposed for improperly marked articles. The
Situation:
There are articles of foreign origin the prevailing price of which in requirement that foreign importation must be marked in any official language of the
the US is equivalent to P100. These articles are sold or dumped in the Phils. at lower Phils., the name of the country of origin of the article.
than the prevailing price in the US because they are saleable in the U.S.
So, this will prejudice our local industries. In order to protect our local product or to
The purpose is to prevent deception of consumers.
discourage people from buying this imported product, we should be impose special
The articles must be properly marked, otherwise a special duty of
duties in addition to the regular duties. Dumping duties should be imposed.
5% of the value shall be imposed.
Tonnage dues are paid by the owner, agent, operator or master of a vessel
DRAWBACKS
engaged in foreign trade based on the net tonnage of the vessel or weight of
Charged and collected for services rendered and documents issued by the
The return of 99% of customs paid on imported articles when they are reBureau of Customs.
exported forming part of domestically produced articles.
The refund of 99% duty on imported fund when used for propulsion vessels REQUIREMENTS OF IMPORTATION UNDER THE TARIFF AND CUSTOMS CODE
engaged in the foreign or coastwise trade.
Liability of importer of duties
The Code provides that all articles imported into the Philippines shall be held
When drawbacks allowed
to be the property of the person to whom the same are consigned; and the
It also constitutes a lien upon the articles imported which may be enforced
2. Wharfage dues
which such articles are in custody or subject to the control of the
3. Berthing fees
government.
4. Storage charges
5. Arrastre charges
GOVERNMENT IMPORTATIONS
6. Tonnage dues
All importations by the government for its own use or that of its subordinate
7. Other fees and charges
branches or instrumentalities, or corporations, agencies or instrumentalities
Harbor fees
owned or controlled by the government shall be subject to the duties, taxes,
Harbor fees are imposed on vessels entering into or departing from a port of
and other charges provided in the Tariff and Customs Code, [Sec. 1205
entry of the Philippines.
Tariff and Customs Code].
Wharfage dues
When importation begins and when deemed terminated
Importation terminates upon payment of the duties and other charges due
upon the articles, or secured to be paid, at the port of entry and the legal
Berthing fees
permit for withdrawal shall have been granted.
In the case of articles that are free of duties, taxes and other charges,
pier, wharf, or river at any port in the Philippines.
importation is deemed terminated from the time they have legally left the
jurisdiction of the customs.
Storage charges
Storage charges are assessed on articles for storage in customs premises, Entry through customhouse
cargo sheds and warehouses.
All articles imported into the Philippines, whether subject to duty or note,
shall be entered through a customhouse at a port of entry. [Section 1201,
Arrastre charges
Tariff and Customs Code]
Arrastre charges are imposed on all imported and exported articles and
A port of entry means a domestic port open to both foreign and coastwise
baggage of passengers for their handling, receiving and custody.
trade, including airport of entry. [Section 3514, Tariff and Customs Code]
Tonnage dues
Cargo manifest
1. When the owner, importer, consignee or interested party, after due notice,
All cargo, exported or imported, shall be included in the cargo manifest,
fails to file an entry within thirty (30) days, which shall not be extendible,
except the ships stores.
from the date of discharge of the last package from the vessel or aircraft; OR
Any person who shall fraudulently import or bring into the Philippines, or
2. A duly licensed customs broker, acting under authority from the holder
assist in doing so, any article, contrary to law, or shall receive, conceal, buy,
of a bill of lading
sell, or in any manner facilitate the transportation, concealment, or sale of
3. A duly empowered agent or attorney in fact for each holder of a bill of
such article after importation, knowing the same to have been imported
lading
contrary to law, shall be guilty of smuggling.
If filed by a party other than the importer, the importer himself is required to
article was smuggled. However, upon trial, if the defendant is found to have
declare under oath and under penalties of falsification or perjury that the
been in possession of such article, this shall be sufficient to authorize the
declarations and statements contained in the entry are true and correct.
conviction unless the defendant explains his possession to the satisfaction
Such statements constitute prima facie evidence of knowledge and consent
of the court.
of the importer.
Fraudulent practices against customs revenue under Section 3602
Period for filing of import entry
1. Entry of imported or exported articles by means of any false or fraudulent
Within thirty (30) days from the date of discharge of the last package from
invoice
the vessel.
2. Entry of goods at less than the true weight or measure.
3. Filing of any false or fraudulent entry for the payment of drawbacks or refund
ABANDONMENT
of duties.
The offices charged with the administration and enforcement of the law are
other charges and expenses.
the Tariff Commission and the Bureau of Customs.
a.2.
a.3.
a.4.
The relations between the rates of duty on raw materials and finished
or partly finished goods;
The effects of ad valorem and specific duties and of compound
specific and ad valorem duties;
All questions relative to the arrangement of schedules and Tax Remedies under the Tariff and Customs Code:
classifications of articles under the tariff law;
a.5. The tariff relations between the Philippines and foreign countries,
Remedies
Government
Importer
commercial treaties, etc.
a.6. The volume of importations compared with domestic production and (1) Administrative or
(a) Enforcement of tax lien
(a) Tax refund
consumption;
extra-judicial
(b) Seizure
(b) Abandonement
a.7. Conditions, causes and effects relating to competition of foreign
(c) Protest
industries with those of the Philippines;
a.8. In general, to investigate the operation of customs and tariff laws and (2) Judicial
(a) Filing of civil action
(a) Appeal to CTA, CA,
to submit report of its investigations; and
(b) Filing of criminal action
SC
a.9. The nature, composition, and classification of articles for customs
if there is fraud and it
(b) Filing of criminal
revenue and other related purposes which shall be furnished no
must be serious
action against erring
NEDA, Board of Investments, Central Bank and the Secretary of
Customs
officials
Finance.
Cases arising under the tariff and customs code
Duties, powers and jurisdiction of the Bureau of Customs
1. Customs protest cases or those where the importer questions the legality of
1. The assessment and collection of the lawful revenues from imported articles
the assessment and collection of customs duties and other fees or charges.
and all other dues, fees, charges, fines and penalties accruing under the
The issue involved in these cases generally relates to the correctness of the
tariff and customs laws.
appraisal and/or classification of imported goods.
2. The prevention and suppression of smuggling and other frauds upon the
2. Seizure and forfeiture cases or those where goods or merchandise are
customs.
ordered seized by customs authorities and made subject to the penalty of
3. The supervision and control over the entrance and clearance of vessels and
forfeiture or fine for violation of the customs laws. Here, the issue involved
aircraft engaged in foreign commerce.
is the legality of the importation of goods either because the goods are in
4. The enforcement of tariff and customs laws and all other laws, rules and
themselves prohibited importations or their importation of effected contrary
regulations relating to tariff and customs administration.
to law.
5. The supervision and control over the handling of foreign mails arriving in the
Philippines, for the purpose of the collection of the lawful duty on the CUSTOMS PROTEST CASES
dutiable articles thus imported and the prevention of smuggling through the
medium of such mails.
Procedure on customs protest cases
6. Supervision and control over all import and export cargoes, landed or stored
1. Firs of all, the Collector shall cause all articles entering the jurisdiction of his
in piers, airports, terminal facilities, including container yards and freight
district and destined for importation through his port to be entered at the
stations, for the protection of government revenue.
customhouse. He shall cause all such articles to be appraised and
7. Exclusive original jurisdiction over seizure and forfeiture cases under the
classified, and shall assess and collect the duties, taxes, and other charges
tariff and customs laws.
thereon, and shall hold possession of all imported articles, upon which
duties, taxes, and other charges have not been paid or secured to be paid,
TAX REMEDIES
disposing of the same according to law. [Section 1206, Tariff and Customs
Code]
IN GENERAL
2. The party adversely affected by the ruling or decision of the Collector
Remedies available to the government
whereby liability for duties, taxes, fees or other charges are determined,
1. Seizure and forfeiture of goods and commodities
may protest such ruling or decision. [Section 2308, Tariff and Customs
2. Judicial action against the taxpayer
Code]
3. The protest, which must be in writing, is filed with the Collector within fifteen
(15) days. No protest shall be considered unless payment of the amount
due after final liquidation (i.e. computation of the liability) has first been
made and the corresponding docket fee actually paid.
4. Every protest shall be filed in accordance with rules and regulations
promulgated for the purpose, and shall point out the particular decision or
6.
7.
8.
Incidentally, in case of appeals to the Court of Tax Appeals from the decisions of the
Secretary of Finance as a consequence of the automatic review by the Secretary of
Finance of decisions emanating form Customs, the thirty-day period of appeal under
Republic Act No. 1125 will necessarily be counted from the receipt of the decision of
the Secretary of Finance.
PROCEDURE IN PROTEST
Remedy
(1) File a protest
(2) If protest is
denied,
Appeal
collectors ruling
(3) If CC affirm
collectors
ruling,
Appeal
(4) If CTA affirm
collectors
ruling,
Appeal
(5) If CA affirm
CTA, Appeal
Where to
file
Collector
of
Customs
Customs
Commissi
oner (CC)
CTA
CA
Question of fact or
Question of law
SC
Question of law
Prescriptive
Period
15 days from the
payment
of
Customs duties
Within 15 days
from receipt of the
Collectors ruling
Within 30 days
from receipt of the
decision of the
CC.
Within 15 days
from receipt of
CTA decision
Within 15 days
from receipt of CA
decision
Imported articles which may be subject to seizure for violation of tariff and
customs laws may be pursued in their transportation in the Philippines by
land, water, or air, and such jurisdiction exerted over them at any place
therein as may be necessary for the due enforcement of the law.
In protest cases, the protestant has the burden of proving the correctness of
his contention for the issue is not whether the Collector was wrong but Places where searches and seizures may be conducted
1. Right of police officer to enter enclosure without a warrant, except a dwelling
whether the importer is right.
house
2. Search of dwelling house must be with proper warrant
SEIZURE AND FORFEITURE CASES
3. Right to search vehicles or aircrafts and persons or articles conveyed therein
Nature of seizure and forfeiture proceedings
4. Right to search vehicles, beasts and persons
Any person exercising the police powers conferred under said Code may at
A customs seizure and forfeiture case is administrative and civil in nature
any time enter, pass through, or search any land or enclosure or any
and is directed against the res or imported articles and entails a
warehouse, store or other building, not being a dwelling house.
determination of the legality of their importation. [Commissioner of
A dwelling house may be entered and searched only upon warrant issued by
Doctrine of primary jurisdiction over seizure and forfeiture cases
a judge of the court, upon sworn application showing probably cause and
[Rallos v. Gako Doctrine 344 SCRA 178]
particularly describing the place to be searched and person or thing to be
It shall be lawful for any official or person exercising police authority under
jurisdiction over imported goods, for the purpose of enforcement of the
the Tariff and Customs Code to go aboard any vessel or aircraft within the
customs laws, from the moment the goods are actually in its possession or
limits of any collection district, and to inspect, search and examine said
control, even if no warrant of seizure or detention had previously been
vessel or aircraft and any trunk, package, box or envelope on board and to
issued by the Collector of Customs in connection with seizure and forfeiture
search any person on board the said vessel or aircraft if under way, to use
proceedings.
all necessary force to compel compliance.
If it shall appear that any breach or violation of the customs and tariff laws of
Jurisdiction of the Bureau of Customs
the Philippines has been committed, whereby or in consequence of which
The Bureau of Customs has the right of supervision and police authority
such vessels or aircraft, or the article, or any part thereof, on board of or
over all seas within the jurisdiction of the Philippines and over all coasts,
imported by such vessels or aircraft is liable to forfeiture to make seizure of
ports, airports, harbors, bays, rivers and inland waters whether navigable
the same or any part thereof.
from the sea or not. [Section 603, Tariff and Customs Code]
The power of search hereinabove given shall extend to the removal of any
No proceeding herein shall give rise to any claim for the damage thereby
603, Tariff and Customs Code]
caused to article or vessel or aircraft.
All persons coming into the Philippines from foreign countries shall be liable
to detention and search by the customs authorities under such regulations
Property not subject to forfeiture
as may be prescribed relative thereto.
The forfeiture of the vehicle, vessel, or aircraft shall not be effected if it is established
that the owner thereof or his agent in charge of the means of conveyance used as
Procedure governing seizure and forfeiture cases
aforesaid has no knowledge of or participation in the unlawful act.
1. Warrant for detention of property. Bond.
However, a prima facie presumption shall exist against the vessel, vehicle or aircraft
Upon making any seizure, the Collector shall issue a warrant for the
under any of the following circumstances:
detention of the property; and if the owner or importer desires to secure the release of
1. If the conveyance has been used for smuggling at least twice
the property for legitimate use, the Collector may surrender it upon the filing of a
before;
sufficient bond, in an amount to be fixed by him, conditioned for the payment of the
2. If the owner is not in the business for which the conveyance is
appraised value of the article and/or any fine, expenses and costs which may be
generally used; and
adjudged in the case: Provided that articles the importation of which is prohibited by
3. It the owner is not financially in a position to own such conveyance.
law shall not be released under bond.
Burden of proof in seizure and/or forfeiture
2. Report seizure to Commissioner and Chairman, Commission on Audit
In all proceedings taken for the seizure and/or forfeiture of any vessel, vehicle,
3. Notification to owner or importer
aircraft, beast or articles under the provisions of the tariff and customs laws, the
4. Notification to unknown owner
burden of proof shall lie upon the claimant. Provided that probable cause shall be
5. Description, appraisal and classification of seized property
first shown for the institution of such proceedings and that seizure and/or forfeiture
6. Proceedings in case of property belonging to unknown parties
was property made.
7. Settlement of case by payment of fine or redemption of forfeited property
Subject to approval of the Commissioner, the district collector may, while the
Commissioner of Customs v. Manila Star Ferry GR# L 31776-78
case is still pending, except when there is fraud, accept the settlement of any seizure
It is not a defense that the owner of the vessel sough to be forfeited had no actual
case provided that the owner, importer, exporter, or consignee or his agent shall offer
knowledge that his property was used illegaly
to pay to the collector a fine imposed by him upon the property, or in case of
forfeiture, the owner, exporter, importer or consignee or his agent shall offer to pay
Seizure of other articles
the domestic market value of the seized article. The Commissioner may accept the
The Commissioner of Customs and Collector of Customs and/or any other customs
settlement of any seizure case on appeal in the same manner.
office, with the prior authorization in writing by the Commissioner, may demand
Settlement of any seizure case by payment of the fine or redemption of
evidence of payment of duties and taxes on foreign articles openly offered for sale or
forfeited property shall not be allowed in any case where the importation is absolutely
kept in storage, an dif no such evidence can be produced, such articles may be
prohibited or where the release of the property would be contrary to law.
seized and subjected to forfeiture proceedings.
8. Decision or action by collector in protests and seizure cases
Provided that during such proceedings, the person or entity for whom such articles
9. Review by Commissioner
have been seized shall be given the opportunity to prove or show the source of such
The person aggrieved by the decision or action of the Collector in any matter
articles and the payment of duties and taxes thereon.
presented upon protest or by his action in any case of seizure may, within fifteen (15)
days after notification in writing by the Collector of his action or decision, give written
Redemption of forfeited property
notice to the Collector and one copy furnished to the Commissioner of his desire to