0% found this document useful (0 votes)

753 views40 pages

Customs Clearance Procedures CAO 2020

Q: Under what conditions can an importer request an extension for submitting documents related to a provisional goods declaration, and what are the implications if these conditions are not met?

An extension for submitting documents related to a provisional goods declaration can be requested if valid reasons are provided and it is filed within the original 45-day period. The extension may be granted for another 45 days. If conditions are not met, such as the failure to submit required permits or documents, regulated goods may be seized, and any security posted may be forfeited, subject to due notice being given to the declarant .

Q: How do related parties affect the transaction value used as a basis for customs valuation according to the CAO provisions?

In transactions between related parties, the transaction value is accepted for customs valuation if the importer demonstrates that the value closely approximates the transaction value in sales to unrelated buyers of identical or similar goods for export to the same country of importation, or the customs value of identical or similar goods as determined under specific sections of the CAO. Additionally, in such sales, the transaction value includes costs such as commissions, containers, packing, royalties, and license fees, as well as certain proceeds and transport costs .

Q: What are the provisions for adjusting the transaction value of imported goods when factors like commissions and royalties are not included in the price?

When commissions (except buying commissions), container costs, packing, royalties, and license fees related to the goods being valued are incurred by the buyer but not included in the price paid, they must be added to the transaction value of imported goods. Additionally, proceeds from the resale, disposal, or use of imported goods accruing to the seller, costs of transport, and handling charges must also be added to establish the customs value .

Q: What is the role of provisional goods declaration in customs processes, and under what circumstances can it be lodged?

Provisional goods declarations facilitate trade and prevent goods from being declared abandoned by allowing importers to lodge a declaration even when certain documents are missing, provided that specific conditions are met. Circumstances for lodging include the absence of a regulatory permit at lodgement if an application has been timely filed, relief consignments, pending TEI issuance, or other valid reasons not due to the declarant’s negligence. The declaration must be completed within 45 days, with a possible extension upon valid request .

Q: How do the customs valuation methods handle situations where goods are not sold in their original imported condition within the specified timeframe?

If imported goods, or identical or similar goods, are not sold in the imported condition within the specified timeframe, the customs value must be based on the unit price of sales after processing within 90 days of importation. The valuation adjusts for the value added by processing and other permissible deductions. If further processing sales are also unavailable, the computed value method is applied .

Q: What are the implications for importers if they fail to correctly declare the transaction value of goods due to omissions in documents?

Failure to correctly declare the transaction value due to omissions or inaccurate documentation can result in adjustments to the declared value, requiring payment of additional duties and taxes. It might also lead to legal consequences such as fines, seizures, or forfeitures if customs determines that omissions are due to negligence or fraudulent intent, which affects the integrity of customs processes .

Q: How does the customs valuation method based on 'deductive value' determine the dutiable value of imported goods?

The deductive value method bases the dutiable value on the unit price at which the imported goods or identical or similar goods are sold in the Philippines in their imported condition, in the greatest aggregate quantity, to unrelated buyers, at or about the time of importation. Deductions include commissions, transport, insurance, and other costs. If the goods are not sold in the condition they were imported, the valuation is based on sales after further processing, adjusting for the added value of processing .

Q: How does the concept of 'computed value' apply in customs valuation when other methods are inapplicable?

The computed value method applies when other valuation methods fail. It includes the cost or value of materials, fabrication, and other processing costs used to produce the imported goods, normal profit and general expenses reflected in export sales of similar goods, and transportation and insurance costs. If assists, container, and packing costs aren't included elsewhere, they are added here. This method ensures a comprehensive valuation reflecting real production and associated costs .

Q: What criteria must be met for goods to be considered 'identical' or 'similar' under the customs valuation methods outlined in the CAO?

Identical goods must be the same in all respects, including physical characteristics, quality, and reputation. Minor differences in appearances do not preclude the goods from being considered identical. Similar goods should have like characteristics and similar component materials enabling them to perform the same functions and be commercially interchangeable. The quality, reputation, and existence of a trademark are factors in determining similarity .

Q: What factors contribute to the determination of a 'provisional goods declaration' becoming a 'final declaration' and the implications of such a transition?

A provisional goods declaration transitions to a final declaration upon the submission of all required documents and information within the stipulated period. It implies that duties, taxes, and other charges are finally assessed and adjusted if necessary. Non-compliance with submission deadlines can lead to forfeiture of securities and potential seizure of goods, impacting the declarant's future compliance and the release of goods .

This Customs Administrative Order prescribes procedures for clearing imports entered for consumption under the Formal Entry Process in accordance with Philippine law and international standards. It defines key terms related to import documentation, cargo types, clearance processes, and the roles of various parties. The objective is to align customs clearance with modern customs practices promoting trade facilitation and compliance.

Uploaded by

SGT

We take content rights seriously. If you suspect this is your content, claim it here.

Available Formats

Download as PDF, TXT or read online on Scribd

0% found this document useful (0 votes)

753 views40 pages

Customs Clearance Procedures CAO 2020

Uploaded by

SGT

We take content rights seriously. If you suspect this is your content, claim it here.

Available Formats

Download as PDF, TXT or read online on Scribd

~ ASTERro

REPUBLIC OF THE PHILIPPINES - py

DEPARTMENT OF FINANCE
BUREAU OF CUSTOMS
MANILA 1099

CUSTOM§ ADMXNISTIRATXVIE OIRIDllER (CAO)

NO. q-..2,[Link]
SUIBJIECT: CLEARANCE PIRO<CIEDIUIRIE§ IFOIR GOODS ENTERIED IFOR
CONSlJJMM"l<OfNl llJIN[D)fEIR TIHIIE IFORMAl IENTIRY P![Link]

Introduction. This CAO implements Sections 103 to 109, Chapter 2, Title I; Sections
400 to 416 Chapter 1, Title IV; Sections 419 to 422, Chapter 2, Title IV; Sections 423
to 436, Chapter 3, Title IV; Sections 700 to 708, Chapter 1, Title VII; Sections 1506
to 1507, Title X.V and Sections 1610 to 1611, Chapter 3, Title XVI pursuant to Sections
204 and 1800 of Republic Act No. 10863, otherwise known as the Customs
Modernization and Tariff Act (CMTA).

Section 1. Scope. This CAO shall apply to all importations entered for consumption
through a Formal Entry Process, whether or not subject to payment of duties and
taxes.

Section 2. Objective. To prescribe the procedures in the customs clearance of

imports covered by goods declaration for consumption through a Formal Entry
Process, that are aligned with international standards and best practices.

Section 3. Definition of Terms. for purposes of this CAO, the following terms are
defined accordingly:

3.1. Air Waybm (AWIS) - shall refer to a transport document for

airfreight used by airlines and international freight forwarders
which specifies the holder or consignee of the bill who has the
right to claim deliver; of the goods when they arrive at the po1t
of destination. It is a contract of carriage that includes carrier
conditions, such as limits of liability and claims procedures. In
addition, it contains transport instructions to airlines and carriers,
a description of the goods, and applicable transportation
charges. 1

3.2. Alert Order - shall refer to a written Order issued by the

Commissioner, District Collector, or other customs officers
authorized in writing by the Commissioner after the Lodgement
of Goods Declaration and before their actual release from
customs custody, on the basis of Derogatory Information

1
CMTA, Title I, Chapter 2, Section 102(d).

Page 1 of 4 · - CAO No. Cf- JD),O

~ ASTER COPY
regarding possible non-compliance with the CMTA and other laws,
rules and regulations enforced by Customs.2

~-~· Aisesiment - shall refer to the process of determining the

amount of duties and taxes and other charges due on imported
goods.3

3.~. Authori~-e d Ageint Bank (MB) - shall refer to banks

authorized by the Bureau to collect payment of duties, taxes and
other charges. 4

3,5. Acc:reditbed Cairgo Surveying Compa11rny {ACSIC) - shall refer

to a surveying company possessing a duly approved accreditation
issued by the Committee for Accreditation of Cargo Surveying
Companies (CACSC). 5

3.6. am ~1 uding {BL) - shall refer to a transport document issued

by shipping lines, carriers and international freight forwarders or
non-vessel operating common carrier for water-borne freight. The
holder or consignee of the bill has the right to claim delivery of
the goods at the port of destination. it is a contract of carriage
that includes carrier conditions, such as limits of liability and
claims procedures. In addition, it contains transport instructions
to shipping lines and carriers, a description of the goods, and
applicable transportation charges. 6
3.7. Birea!k Bulik Cargo - shall refer to non-containerized general
cargo stored in boxes, bales, pallets or other individual units to
be loaded onto or discharged from vessels, not shipped in
containers or in bulk. 7
3.8. lh.a~lk Cargo - shall refer to cargoes in a mass of one commodity
not packaged, bundled, bottled or ot'iervvise packed.8

3,;9. Clearance - shall refer to the completion of customs and other

government formalities necessary to allow goods to enter for
consumption. 9

3.10. Commerc:ia~ Quantity - shall refer to the quantity for a given

kind or class of articles which are in excess of what is compatibl.e

2
CAO No. 7-2019 "Prelodgement and Control Order and Alert Order, Section 3.1.
3
cf. CMTA, Title I, Chapter 2, Section 102(f); cf Revised Kyoto Convention (RKC), General Annex,
Chapter 2 "Definitions", E2/F19.
q Manual on cargo Clearance, Definition of Terms, page vii.
5
CMO No. 18-2010 on "Procedure for the Bulk and Brea!< Bulk Cargo aearance Enhancement Program
Mandated under Administrative Order No. 243 as amended by AO No. 243-A", Section 2.1.
6
CMTA, Title I, Chapter 2, Section 102(h).
7
CMO No. 18-2010 on " Procedure for the Bulk and Break Bulk Cargo Clearance Enhancement
Program Mandated under Administrative Order No. 243 as amended by AO No. 243-A", Section 2.4.
8
CMO ~Jo. 18-2010 on "Prncedt1re for the Bu!k and Break Bulk Cargo C!earance Enhancerr:ent
Program Mandated under Administrative Order No. 243 as amended by AO No. 243-A..... Section 2.3.
9
d. CMTA, Title I, Chapter 2, Section 102(1<); cf RKC, General Annex, Chapter 2 "Definitions", ES/f9.

Page 2 of 40 - CAO No.

- ~>

tY
~ ASTER COPY
with or commensurate with a person's normal requirements for
personal use.10

~JUL Co9'il«lla8:ooiilai~W 'ir<ffil! aJ8i)<dJ/@ir i:i)M\tW lE.2!lfllMl(Pil: lirntportaito@ril -

shall refer to goods exempt from the payment of import duties

and/or taxes upon compliance with certain formalities prescribed
under pertinent customs issuances.11
3.12. Coinsigin@e - shall refer to the party appearing in the transport
document to whom delivery may be !avvfu!!y made !n accordance
with the contract of carriage. 12

3.13. C11.1stom:;i; Br@ker - shall r,efer to any person who is a bona fide
holder of a valid Certificate of Registration or Professional
Identification Card issued by the Professional Regulatory Board
and Professional Regulation Commission pursuant to Repubiic Act
No. 9280, as amended, otherwise known as the "Customs Brokers
Act of 2004",13 as further amended by Republic Act No. 9853. As
used in this CAO, Customs Broker shall mean those registered
and authorized to transact with the Bureau in behalf of the
importer pursuant to CAO No. 5-2019.

3.14, Declarant - shall refer to any person who makes a goods

declaration or in whose name a goods declaration is made,14 as
enumerated under Section 5.1 of this CAO. Further, in the
processing of goods declaration under the Formal Entry Process,
the dedarant must be accredited and iegistered with the Bureau
and authorized to electronically lodge the ·goods declaration.
For non-regular importation, the declarant must comply with the
rules on th·e registration of Non-Regular Importer (NRI). 15
3 .15. Deferred P1t1v ment Government [Link] (Dl?GA) - shall
refer to the approval and processing of tax expenditures subsidies
on National Internal Revenue Taxes and import duties payable or
assumed by departments, bureaus, and other offices of the
National Government including constitutional offices enjoying
fiscal autonomy, and state universities and colleges. 16
3.:16~ iDi$«:hairgce o·f l ast Package - shall refer to the completion of
the unloading of the entire shipment from the international carrier

1
°CAO No. 06-201·& on "Conditionally Tax and/or Duty B-Oerr,pt Imi;ortation of .,,R~turning Residents"
and Overseas Alipir.o Workers (OFWS)", Section 3.4.
n d . OITA, Title vm, Chapter 1, Section 800, 1rt paragraph.
11
CAO No. 01-2007 on "Penalties Related to Inward Foreign Manifest ar.d Coosol\dat.£sci Cargo
[Link]", Glossary of Terms, Section 2.7.
13
CMTA, Trtte 1, Chapter 2, Section 102(n).
14
d. RKC, General Annex, Chapter 2 "Definitions", E14/F7.
·'5 cf. 010 44-2009, Sect1on 2.1.
16
cf. Dei:,,artment c,f Finance, Department of Budget ar:d Man29,ement Joint Circular No. 1 dated April
30, 2014.

Page 3 of 40 - CAO No. q- ;J,,OP--0

._
(9
~ ASTER COPY
which is the reckoning period within which to lodge the goods
declaration.

l.:ll. 7J. [Q)o$telhli81~(8 19>~rt §MN<e'f.f (ID)!P>$) ~e!PM')ot - shall refer to a report
issued by an ACSC for bulk or break bulk cargo after the conduct
of a survey at the port of discharge. 17

l.i~. ©[Link] INkottfiaiJ -shall refer to the notification to the owner,

importer, consignee or interested party to lodge or file, pay, claim,
or mark by the Collector of Customs through :

a. Electronic notice sent to the registered electronic mail address

of concerned accredited importers;

lb>. Registered mail or personal service; or

e. , Public posting in bulletin boards or other conspicuous places

within the customshouse in case of unknown consignees.

3.1$>. EismolJllo<e Jitnwlftir~ 1For(eog01 Cairgo M1B1irnivast1: (e~l:tFCM) -

shall refer to the advance electronic conveyance of freight
information to the Bureau prior to the arrival of the shipment at
the port of entry18 and provides the detailed list of cargo (freight)
on board a vessel or aircraft giving the commercial particulars of
the goods, such as transport document numbers, consignors,
consignees, marks and numbers, number and kind of packages,
weight, descriptions, quantities of the goods and destination. 19

3.2@. Ent1111 - shall refer to the act, documentation and process of

bringing imported goods into the customs territory, including
goods coming from free zones.20

3.21, IEmllmnMtac1111 cif Go«:D<dls21 shall refer to the physical,

-
documenta1y, or non-intrusive inspection of goods to ensure that
the nature, [Link], condition, quantity, value and tariff
classification of the goods are in accordance with the particulars
furnished in the goods declaration and other supporting
documents.

3.22. IFcll'mi!ID fEirnt!i'J 1P'ir1M:esi5 - shall refer to the cargo clearance

process for impo1ted shipments considered to be of commercial
nature which are those in excess of FOB or FCA value limitation
for informal entry and those for which the informal entry process

17
CMO No. 18-2010 on "Procedure for the Sulk and Break Bulk Cargo Clearance Enhancement
Program Mandated under Administrative Order l\lo. 243 as amended by AO No. 243-A", Section 2.6.
18
cf. [Link] farrow .com/article-what-is-emanifest.
19 cf. WCO Glossary of International Terms.

°
2 CMTA, Title I, Chapter 2, Section 102(r).

J-
21 d. RKC, General Annex, Chapter 2 "Definitions", f.17/F27.

4 of 40 - CAO No.
~ ASTER COPY
may not be used, subject to the exceptions provided under the
CMTA. 22

[Link]. fll'(!!l® [Link]!ll'll"B®ll' (!FICA) - shall mean that the seller delivers the
goods to the carrier or another person nominated by the buyer at
the seller's premises or another named place. The parties are well
advised to specify clearly as possible the point within the named
place of delivery, as the risk passes to the buyer at that point. 23
3,24. free on !Board (FO!S) - shall mean that the seller delivers the
goods on board the vessel nominated by the buyer at the named
port of shipment or procures the goods already delivered. The
risk of loss of or damage to the goods passes when the goods are
on board the vessel, and the buyer bears all costs from that
moment onwards.24

3.2!5. fr!l"i:ee ZOil'die - shall refer to special economic zones registered

with the Philippine Economic Zone Authority (PEZA) under
Republic Act No. 7916, as amended, duly chartered or legislated
special economic zones and freeports such as Clark Freeport
Zone; Poro Point Freeport Zone; John Hay Special Economic Zone
and Subic Bay Freeport Zone under Republic Act No. 7227, as
amended by Republic Act No. 9400; the Aurora Special Economic
Zone under Republic Act No, 9490, as amended; the Cagayan
Special Economic Zone and Freeport under Republic Act No.
7922; the Zamboanga City Special Economic Zone under Republic
Act No. 7903; the Freeport Area of Bataan under Republic Act No.
9728; and such other freeports as established or may be created
by law. 25

,'3.2~. freenw 1tmpcrtalb!e Geed$ - shall refer to goods that may be

freely imported into the Philippines without need for import
permits, clearances or licenses, unless otherwise provided by law
or regulation.26

3 ..11.. Good5 - shall refer to articles, wares, merchandise and any

other items which are subject of importation.27
3 .21&. Good~ IDedall"aition - shall refer to a statement made in the
manner prescribed by the Bureau and other appropriate agencies,
by which the persons concerned indicate the procedure to be
obs•erved in the application for the entry or admission of imported

22
cf. CMTA, Title JV, Chapter 1, Section 402.
23
d. CAO No. 02-2016 on "Imported Goods with De Minimis\Jalue Not Subject to Duties and Taxes",
Section 3.3.
24
d . CAO No. 02-2016 on "Imported Goods with De MinimisValue Not Subject to Duties and Taxes",
Section 3.4.
25 CMTA, Title I, Chapter 2, Section 102 (w).
26
d . CMTA, Title I, Chapter 3, Section 116.
27
d. CMTA, Title I, Chapter 2, Section 102(x).

Page 5 of 40 - CAO No.

~ ASTER COPY
goods and the particulars of which the customs administration
shall require.2s

33.2~. ~@«)©!$ IEll'il!t~,r@itil fo,r «:@111J$Mll1Til!P)ll:0@1111 - shall refer to goods

entered for domestic or locai use.

3,l@. 11:mpcll'il:atecif'il - shall refer to the act of bringing in of goods from

a foreign territory into Philippine territory, whether for
consumption, warehousing, or admission. 29

3l.3lli.. Jilfilii!Hdi'i'lsrtenfc iEtr1rCit' - shall refer to a mechanical, eiectronic or

clerical error committed unintentionally by the Importer and
occurred notwithstanding the maintenance of internal controls
necessary to avoid such errors. 30

33,32. [Link] fcfrtt S!lJlrnev (ILIJllS) ~e[Potril: - shall refer to a report issued
by an ACSC foi bulk or break bulk cargo to be imported into the
Philippines. The report shall be submitted to the Bureau directly
from the ACSC in a secure electronic format. 33

3 .33. Loc!lgeme1111it - shall refer to the electronic registration of a goods

declaration with the Bureau, 34 in a manner prescribed under
customs laws, rules and regulations.

3.34. 1Natoo1111a8 Siinglie ~ionidlow (NSW) - shall refer to the system

that enables a single submission of data and information that is
synchronously processed by other Departments and Agencies of
the government, resulting in a single point of decision for the
release of cargoes by the Bureau. 35

3.3!5. IN0!11l·R~uffall' ll:m[Porte,r - shall refer to one importation for the

period of 365 days from date of approval by the District Collector
of the port.

3.35. Onffine IR.e~sase Syittem ([Link]) - shall refer to the electronic

transmission to deliver instruction messages from the Bureau to
the concerned operator of the facilities handling the goods which
include terminal operators, off-dock container yard-container
freight station (CY-CFS) operators, and warehouse operators,
granting these entities authority to release the goods to the
rightful owner. 36

3.31. IP'c1111: elf !Entry - shall refer to a domestic port open t o both
domestic and international trade, including principal ports of entry

28
ct. CMTA, ntle !, Chapter 2, Section 102(y)-,-
19 cf. CMTA, Tit!e I, Chapter 2, Section l02(z).
30
CAO No. 01-2019 on "Post Clearance Audit and Prior Disclosure Program" , Section 3.6.
33
CMO Mo. 18-2010 on "Procedure for the Bulk ar.d Break Bui'.< Cargo Clearance Enhancement
Program Mandated under Administrative Order No. 243 as amended by AO No. 243-A", Section 2.5.
31
' CMTA, Title I, Chapter 2, Section 102(dd).
35
cf. EO No. 482, s.2005 on "Creating the National Single Window Task Force for Cargo Clearance".
36
cf. Manual on Cargo Clearance Procedure, page ix.

Page 6 of 40 - CAO No.

-~
{fl
YMASTERCOPY
and subports of entry. A principal port of entry is the chief port of
entry of the Customs District wherein it is situated and is the
permanent station of the District [Link] d such port. Subpcrts
of ent1v are under the administrative jurisdiction of the District
Collector of the principal port of entry of the Customs District.
Port of Entry as used in this CAO shall include airport of entry. 37
3.38. Prohibited Goods - shall refer to the following goods, the
importation and exportation of which are prohibited:

3.3!.1. Written or printed goods in any form containing any

matter advocating or inciting treason, rebellion,
insurrection, sedition against th,e government of the
Philippines, or forcible resistance to any law of the
Philippines, or written or printed goods containing any
threat to take the life of, or inflict bodily harm upon any
person in the Philippines;
:[Link].2, Goods, Instruments, drugs and substances designed,
intended or adapted for producing unlawful abortion,
or any printed matter which advertises, describes or
gives direct or indirect information wher•e, how or by
whom unlawful abortion is committed;
3.38.3. Written or printed goods, negatives or cinematographlc
films, photographs, engravings, lithographs, objects,
paintings, drawings or other representation of an
obscene or immoral character;
3"33.4. Any goods manufactured in whole or in part .of gold,
silver or other precious metals or alloys and the stamp,
brand or mark does not indicate the actual fineness of
quality of the metals or alloys;
3,38.:S. Any adulterated or misbranded food or [Link] 'for
human consumption or any aduft,erated or mjsbrarn:J·ed
drug in violation of relevant laws and regu!ations;
.3.3S.6, Infringing goods as defined under the Intell ectual 1

ProP"erty Code and related laws; and

3.3,8,'1. All other goods or parts thereof, which importation are
explicitly prohibited by law or rules and regulations
issued by the competent authority. 38

3.39. Regu~a'l:ed Goods - shall refer to goods, the importatioI and

exportation of which are subject to regulation and shall only be
allowed [Link] securing the necessary clearances, licenses, and any
other require~nts, prior to importation or exµortation. In cas(?

37 d. CMTA, Title I, Chapter 2, Section 102 (hh).

38 d. CMTA, Title 1, Chapter 3, Section 118.

Page 7 of 40 - CAO No. 9- ~2,,()

ct
VMASTER COPY
of importation, submission of requirements after arrival of the
goods but prior to release from customs custody shall be allowed
b1Jt only in cases provided for by governing !avvs or regulations. 39

3."iJ.@. ~e!eaJss of Gcodls - shall refer to the action by the Bureau to

permit goods undergoing clearance to be placed at the disposal
of the consignee or holder of the covering BL or AWB concerned
upon compliance with legal formalities and payment of duties,
taxes and other charges in case of dutiable imports. 4 i

3.41-.1 . Resltroctecff <Goods - shall refer to the following goods, the

importation and exportation of which are prohibited, except when
authorized by law or regulation:

3.'1J.1.! . Dynamite, gunpowder, ammunitions and other

explosives, firearms and weapons of war, or parts
thereof;

l .41.l . Roulette wheels, gambling outfits, loaded dice, marked

cards, machines, apparatus or mechanical devices used
in gambling or the distribution of money, cigars,
cigarettes or other goods when such distribution is
dependent on chance, including jackpot and pinball
machines or similar contrivances, or parts thereof;

3.41.3. Lotter; and sweepstakes tickets, except

advertisements thereof and lists of drawings therein;

3.41.4. Marijuana, opium, poppies, coca leaves, heroin or other

narcotics or synthetic drugs whk:h are or may hereafter
be declared habit forming by the President of the
Philippines, or any compound, manufactured salt,
derivative, or preparation thereof, except when
imported by the government of the Philippines or any
person duly authorized by the Dangerous Drugs Board,
for medicinal purposes;

3.41.S. Opium pipes or parts thereof, of •whatever materials;

and

3.41.!6, Any other goods the importation of which is

restricted, 42 e.g. Weapons of mass destruction and
goods included in the National Strategic Goods List
(NSGL) as provided under Republic Act No. 10697 or
the Strategic Trade Management Act (STMA) and Toxic
and Hazardous goods under Republic Act No. 6969 or

39
d. CMTA, Title I, Chapter 3, Section 117
41
cf. CMTA, Title I, Chapter 2, Section 102(1<1<); d RKC, General Annex, Chapter 2 "Definitions",
E24/F20.
42 d. CMTA, Title I, Chapter 3, Section 119.

Page 8 of 40 - CAO No. Cf- :[Link]

Y MASTER COPY
the "Toxic Substances and Hazardous and Nuclear
Wastes Control Act of 1990",43

The restriction to import the above stated goods shall include the
restriction on their transit.

3l.~2. ~efclUJIJ"llil - shall refer to the findings made by the customs officer
after examination as to the description, appraisal and
classification of the goods.

3.43. Se<eiall'jttif - shall refer t o any form of guaranty, such as a surety

bond, cash bond, standby letter of credit or irrevocable letter of
credit, which ensures the satisfaction of an obligation to the
Bureau. 44

3 •.~.6}. Sorag~e .A,tllm51111!s1tr2a:ave Dcc~mant (SAID) - shall refer to an

internationally used form as customs declaration or goods
declaration, designed to standardize customs documents,
harmonize codification and simplify procedures in international
trade exchanges: 45

3.45. Sll.i1iP!P)Hement<a1il Dedii!ll!"a!~Cll'il Cini V'aHllJlafcno,rn (SDV) - shall refer

to the form prescribed by the Bureau and accomplished under
oath containing information pertaining to the circumstances
surrounding the import transaction such as on the existence or
non-existence of relationship between the buyer and the seller,
payment of royalties or license fees, provision for assists, and/or
any other adjustments to the price paid or payable as provided in
this CAO.46

3A~6. Tax Cr~dolt C<211'tl:o!foaifte (1PC<C) - shall refer to certification duly

issued to the grantee-importer named therein by the
Commtssioner or hrs dufy authorized representative
acknowledging that the grantee-importer named therein is legally
entitled tax credit, the money value of which may be used in
payment or in satisfaction of any of his customs duty or tax
obligations or may be converted as a cash refund.47

3.41. l ax IDielbal'c IMlsll1J1lc (11"DM) -

shall refer to the document
authorizing the utilization of the TCC as payment for customs
duties or tax obligations of the grantee-importer. A TCC cannot

43
CAO 6-2016 on "Conditionally Tax and/or Duty-Exempt Importation of Returning Residents and
Overseas Rlipino Workers (OFWs)" .
41
CMTA, Title I, Chapter 2, Section 102{mm); cf RKC, General Annex, Chapter 2 "Definitions",
E26/F17.
H d . UNCTAD, ASYCUDA.
-46 cf. A Brief Presentation by Philippine Customs at the uVTO Seminar on Technical Assistance on
Customs Valuation at Geneva, 6·7 November 2002.
47
CAO 4-2019 on "Duty Drawbacl<, Refund and Abatement" , Section 3.4.

Page 9 of 40 - CAO No. q-2,,0.t,()

k ASTERCOPY
be utilized as payment for duty or taxes without a duly approved
TDM.48

l.4~. ii"ill!t IE2tiSm1PJtilo1n Jindorrsem~rnt (aleli'.) - shall refer to an

indorsement from the Revenue Office (RO) of the Department of
Finance (DOF) evidencing exemption of a particular importer from
payment of duties and/or taxes on his importations.

:3,.~\El. lrlBllllt«!ith,e Asses;$mell'ilfc50

- shall refer to the provisional
character of the assessment in case of:

3.~~.11.. Provisional goods declaration pending completion by

the declarant on the additional information or
document required to complete the goods declaration
within the period provided in Section 5.7.5 of this CAO;
or

3.,4 ~.l. An importation whose goods declaration is under

dispute pending its resolution.

3.5©. if'teirntative !Releaiie - shall refer to the physical release of goods

under tentative assessment.

Sectioirn 4. Gef111era~ Piroyisic111s.

4.:ll.. Wlhteil1l importattioll1l Bego111s all'\ld /Oeemed Te1rmoll'llalted.
Importation begins when the carrying vessel or aircraft enters the
Philippine territory with the intention to unload therein.
I mportat ion is deemed terminated when:

4.:L:11.. The duties, taxes and other charges due upon the
goods have been paid or secured to be pa~d at the port
of entry and legal permit for withdrawal has been
granted; or

~.1.l. In case the goods are deemed free of duties, taxes and
other charges, the goods have legally left the
jurisdiction of the Bureau.51

4,l. <GOO<dl!S UaibDie for Dtu1toe1S a1111d laxes. All goods, when imported
into the Philippines, shall be subject to duty and tax upon
importation, including goods previously exported from the
Philippines,52 except the following:

4 ..l.:ll.. Those considered as de minimisimportations pursuant

to Section 423, Chapter 3, Title IV of the CMTA;

48
CAO 4-2019 on "Duty I)rawback, Refund and Abatement" , Section 3.5.
50 cf. CMTA, Title IV, Chapter 3, Sections 425 and 426.
51 CMTA, Title I, Chapter 2, Section 103.
52
cf. CMTA, Title I, Chapter 2, Section 104, 1st paragraph.

Page 10 of 40 - CAO No. 9-;[Link]

~ ASTERC:-OPV
4 .2.2. Those that are conditionally tax and/or duty-exempt
importations under Section 800, Chapter 1, Title VIII of
the CMTA;
~.2.3. Importations under the customs bonded warehousing
system subject to conditions of Section 812, Chapter 2,
Title VIII;
4.2.4. Goods for admission into Free Zones;
4.2.S. Relief consignments under Section 120 and 800 (m) of
the CMTA;
4.2.6. Stores under Sections 818 to 821, Chapter 4, Title VIII
of the CMTA; and
~.2.7. Goods granted exemption privileges under other laws.
4.3. Entry of Importted Goods. All goods imported into the
Philippines shall be entered through a customs office at a Port of
Entry, or may be admitted to or removed from a Free Zone, as
the case may be. 53
Imported goods shall be deemed "entered" in the Philippines for
consumption when the goods declaration is electronically lodged,
together with any required supporting documents54 in the BOC
electronic cargo clearance system portal.
4.4. Importat1ons by th~ Government. Except those which are
considered as conditionally tax and/or duty-exempt importations,
all importations by the government for its own use or that of its
subordinate branches or instrumentalities, or corporations,
agencies owned or controlled by the government, shall be subject
to duties, taxes, fees and other charges. 55
In case of deferred payment, it shall comply with the pertinent
regulations of Department of Budget and Management (DBM) and
other government agencies on deferred payment scheme.
4 .5. Owner of Imported Goods. The following shall be deemed
owners of imported goods:
4.5.1. Consignee;
4.5.2. Holder of the negotiable Bl, AWB, or other equivalent
transport document if duly endorsed by the consignee
therein or if consigned to order, duly endorsed by the
consignor; and

53 cf. CMTA, Title IV, Chapter 1, Section 400.

5'1 cf. CMTA, Title I, Chapter 3, Section 115.
55 cf. CMTA, Title IV, Chapter 1, Section 406.

Page 11 of 40 - CAO No. 9- J-o~

(ff'
~ ASTER COPY
&}.~.3. Underwriters of abandoned goods and salvors of goods
saved from wreck at sea, coast, or in any area of the
Philippines. 56

~.~. [Link] ffcll" li:»[Link]!:oies and Taxes. Unless relieved by laws and
regulations, the importer or owner shall be liable for duties, taxes,
fees and other charges plus interests, if any, due for each
importation. Such liability constitutes a personal debt of the
importer or owner to the government and shall be discharged
only upon full payment. It also constitutes a lien on the imported
goods which may be enforced while such goods are under
customs' custody. 57

4 .7. Dot:lll!m~ll'ilt"allfV 11<.equiirements. Unless and until the Bureau is

operating in a paperless environment, the printout of the SAD
signed by the declarant and the customs broker, if any, and duly
notarized, must be submitted to the Formal Entry Division (FED)
or its equivalent office or unit, together with the following
documents which shall form an integral part of the Goods
Declaration:

[Link].. Duly accomplished SDV form. The Bureau shall require

the submission of the SDV In the prescribed form 01· the
printed electronic copy thereof and should be notarized,
until such time the SDV is incorporated in the customs
system;

4.7.2. Duly endorsed BL or AWB, or in the absence thereof, a

written order (Delivery Order, Telex Release or Release
Order) by the carrier or agent of the vessel or aircraft;

4.7.3. Commercial invoice, letter of credit or any other verifiable

commercial document evidencing payment; in cases
where there is no sale for export, by any commercial
document indicating the commercial value of the goods; 53

4.7.4. Packing list, or the commercial invoice, provided, it

contains the itemized specific information; and

4.1.5. Documents as may be required by rules and regulations,

such as:

a. Import authority, permit, clearance or license for

imported goods listed in the official list of regulated
goods as posted in the BOC website. For this
purpose, the Bureau shall periodically update the
official list of regulated goods;

6
~ d. c r,,JTA, Title IV, Chapter 1, Section 404.
57 cf. CMTA, Title IV, Chapter 1, Section 405.
sa d . CMTA, Title IV, Olapter 1, Section 402, last paragrapl1.

Page 12 of 40 - CAO No. q-..2-0.2,()

~ ASTERC-Ol=)y
It». Sanitary and Phytosanitary Import Clearance
(SPSIC);
c. Authority to Release Imported Goods (ATRIG);

d. Certificate of Origin (for various Free Trade

Agreements and Economic Partnership Agreements)
or other Proof of Origin such as Invoice Declaration
by Certified Expetter when the Self Certification
System is availed of by contracting countries and
Origin Declaration by Approved E)(porter for PH-
EFTA FTA;
~- Advance Ruling, if the ruling was applied in the
lodgement of the goods declaration;
f. LPS or DPS report for bulk or break bulk
importations;

g. TEI, if applicable; and

h. Other documents as may be required by the Bureau

or existing regulations.

To enhance customs control and support a cost-effective

customs operations geared towards a paperless customs
environment, the Bureau shall, after due consultation with
directly affected parties and stakeholders, develop and
implement an JCT-enabled customs cargo clearance
system based on international standards. Towards this
end, the Bureau shall communicate, exchange and
process trade-and logistics-related information in the
national and intemationaJ level through the NSW facility
for the efficient and prompt clearance of goods and
commodities in a technology-neutral and secured
infrastructure for business, industries, and government.59

-4.S. [Link]!bmty of E9ectro1n~c 10c1:ume:111tts. for purposes of

customs procedures, electronic documents, permits, licenses or
certificates shall be acceptable and shall have the legal effect,
validity or enforceability as any other document or legal writing.
Provided, that when the prescribed requirements are duly
complied with, the Bureau shall:

a. Recognize the authenticity and reliability of electronic

documents;

b. Transmit approval in the form of electronic data messages or

electronic documents; and

59 cf. CMTA, litle 1, Chapter 2, Section 109, 1rt, 2•d, 3rd and last paragraphs.

Page 13 of 40 - CAO No. CJ- :loJ,Q

(i
~ ASTER COPY
c. Require and/or accept payments and issue receipts
acknowledging such payments through systems using
electronic data messages or electronic documents.60

Electronically submitted goods declaration shall be governed by

Republic Act No. 8792, otherwise known as the "Electronic
Commerce Act of 2000" and its Implementing Rules and
Regulations. Such declarations when printed and certified by a
competent customs officer as a faithful reproduction of the
electronic submission shall be considered as actionable
documents for purposes of prosecuting a declarant if the
declarations are found to be fraudulent. 61

4.9. Metlhlod!.i off Valuait1:00U11.

[Link]. SeqlJJleU1!tiaO Ajpl)ll~icattio~ of VallUc!JtiOll'll Method. Imported
goods shall be valued in accordance with the provisions of
Section 4.9.2 of this CAO whenever the conditions prescribed
therein are fulfilled.

Where the customs value cannot be determined under the

provisions of Section 4.9.2. of this CAO, it is to be determined
by proceeding sequentially through the succeeding sections
under which the customs value can be determined. Except as
provided in Section 4.9.5. of this CAO, it is only when the
customs value cannot be determined under the provisions of a
particular section that the provisions of the next section in the
sequence can be used.

If the importer does not request that the order of Sections 4.9.5.
and 4.9.6. of this CAO be reversed, the normal order of the
sequence is to be followed. If the importer so requests but it is
impossible to determine the customs value under Section 4.9.6.
of this CAO, the customs value shall be determined under
Section 4.9.5. of this CAO.

When the customs value cannot be determined under Section

4.9.2. through Section 4.9.6., it may be determined under
Section 4 .9 .7. of this CAO.62

4.9.2. Tran!.Saction Vanwie System - Method One. The transaction

value shall be the price actually paid or payable for the goods
when sold for export to the Philippines adjusted in accordance
with the provisions of this section. Provided that:

a, There are no restrictions as to the disposition or use of the

goods by the buyer other than restrictions which:

°CMTA, ntle I, Chapter 2, Section 109, 5

6
61
th
paragraph.
CMTA, Title IV, Chapter 1, Section 412, last paragraph.
62
d CMTA, Title VII, Chapter 1, Section 700.

Page 14 of 40 - CAO No. [Link]

a.
~MASTER COPY
Are imposed or required by law or by Philippine
authorities;

aa. Limit the geographical area in which the goods may be

resold; or

m. Do not substantially affect the value of the goods.

lb>. The sale or price is not subject to some condition or

consideration for which a value cannot be determined with
respect to the goods being valued; and

IC. The buyer and the seller are not related, or where the buyer
and the seller are related, that the transaction value is
acceptable for customs purposes under the provisions
hereof.

For the purposes of this CAO, persons shall be deemed related

only if:

o. They are officers or directors of one another's

businesses;

uo. They are legally recognized partners in business;

m. There exists an employer-employee relationship between

them;

ov. Any person directly or indirectly owns, controls or holds

five percent (5%) or more of the outstanding vot ing
stocks or shares of both seller and buyer;

v. One of them directly or indirectly controls the other;

vi. Both of them are directly or indirectly controlled by a
third person;

vo§. Together they directly or indirectly control a third person;

~m. They are members of the same family, including those

relat ed by affinity or consanguinity up to the fourth civil
degree.

Persons who are associated in business with one another in that

one is the sole agent, sole distributor or sole concessionaire,
however described, of the other shall be deemed to be related
for the purposes of this CAO if they fall within any of the eight
(8) cases cited in the preceding paragraph.

In a sale between related persons, the transaction value shall

be accepted as basis for customs valuation whenever the
importer demonstrates t hat such value closely approximates
one of the following occurring at or about the same time:

Page 15 of 40 - CAO No. Cf'-olo .2o

'
~ ASTER COPY
ai. The transaction value in sales to unrelated buyers of
identical or similar goods for export to the same country
of importation;

lb. The customs value of identical or similar goods as

determined under the provisions of Section 4.9.5. of this
CAO; or
c. The customs value of identical or similar goods are
determined under the provisions of Section 4.9.6. of this
CAO.

In determining the transaction value, the following shall be

added to the price actually paid or payable for the imported
goods:

~- To the extent that they are incurred by the buyer but are
not included in the price actually paid or payable for the
imported goods:

e. Comm~sions and brokerage fees except buying

commissions;

ia. Cost of containers;

m. Cost of packing, whether for labor or materials;

av. Valu~, apportioned as appropriate, of the following

goods and services: materials, components, parts and
similar items incorporated in the imported goods;
tools; dies; moulds and similar items used in the
production of imported goods; materials consumed in
the production of the imported goods; and
engineering, develop'm ent, artwork, design work and
plans and sketches undertaken elsewhere than in the
Philippines and necessary for the production of
imported goods, where such goods and services are
suppiied directly or indirectly by the buyer free of
charge or at a reduced cost for use in connection with
the production and sale for export of the imported
goods; and

v. Amount of royalties and license fees related to the

goods being valued that the buyer must pay either
directly or indirectly, as a condition of sale of the goods
to the buyer.

lb. Value of any part of the proceeds of any subsequent

resale, disposal or use of the imported goods that accrues
directly or indirectly to the seller;

Page 16 of 40 - CAO No. Cf- .[Link]

("
~ MASTER COPY
c. Cost of transport of the imported goods from the port of
exportation to the port of entry in the Philippines;
id!. Loading, unloading and handling charges associated with
the transport of the imported goods from the country of
exportation to the port of entry in the Philippines; and
<e. Cost of insurance.

All addrtions to the price actually paid or payable shall be made

only on the basis of objective and quantifiable data.63

4 ..9.3. 1T'rail11sadtiora [Link] of Xdenti~al Goo«lls - Meitho«ll Two.

Where the dutiable value cannot be determined under method
one, the dutiable value shall be the transaction value of identical
goods sold for export to the Philippines and exported at or about
the same time as the goods being valued. For purposes of this
section, "Identical goods" refer to goods which are the same in
all respects, including physical characteristics, quality and
reputation. Minor differences in appearances shall not preclude
goods otherwise conforming to the definition from being
regarded as identical.

If in applying this section, more than one transaction value of

identical goods are found, the lowest value shall be used to
determine the customs value. 64
4.9.4. Trairnsactio111 Value of Similar Goods - Metlhod Three.
Where the dutiable value cannot be determined under the
preceding method, the dutiable value shall be the transaction
value of similar goods sold for export to the Philippines and
exported at or about the same time as the goods being valued.
For purposes of this section, "Similar goods" refer to goods
which, although not alike in all respects, have like characteristics
and similar component materials which enable them to perform
the same functions and to be commercially interchangeable.
TI1e quality of the goods, its reputation and the existence of a
trademark shall be among the factors to be considered in
determining whether goods are similar.

If in applying this section, more than one transaction value of

similar goods are found, the lowest value shall be used to
determine the customs value.65

4,9.5, DIS«ill!Jctfive V210llJle - Meft&ncd IFouir. Where the dutiable value

cannot be determined under the preceding method, the dutiable
value shall be the deductive value unless otherwise requested
by the importer as provided in Section 4.9.1. of this CAO. The

63 d CMTA, Title VII, Chapter 1, Section 701.

64 d CMTA, Title VII, Chapter 1, Secticn 702.
65 d CMTA, Title VII, Chapter 1, Section 703.

Page 17 of 40 - CAO No. C/-,t,,o,J,O

~ ASTER COPY
deductive value which shall be based on the unit price at which
the imported goods or identical or similar imported goods are
sold in the Philippines, in the same condition as when imported,
in the greatest aggregate quantity, at or about the time of the
importation of the goods being valued, to persons not related
to the persons from whom they buy such goods, subject to
deductions for the following :

a. Either the commissions usually paid or agreed to be paid er

the additions usually made for profit and general expenses
in connection with sales in such country of imported goods
of the same class or kind;

b. The usual costs of transport and insurance and associated

costs incurred within the Philippines;

c. Where appropriate, the cost of:

i. Transport of the imported goods from the port of

exportation to the port of entry in the Philippines;

ii. Loading, unloading and handling charges associated with

the transport of the imported goods from the country of
exportation to the port of entry in the Philippines; and

m. Insurance.

d. The customs duties and other national taxes payable in the

Philippines by reason of the importation or sale of the goods.

If neither the imported goods nor identical nor similar imported

goods are sold at or about the time of importation of the goods
being valued in the Philippines in the conditions they were
imported, the customs value shall, subject to the conditions set
forth in the preceding ppragraph, be based on the unit price at
which the imported goods or identical or similar imported goods
sold in the Philippines in the condition they were imported and
at the earliest date after the imµ,ortation of the goods being
valued, but before the expiration of ninety (90) days after such
importation.

If neither the imported goods nor identical nor similar imported

goods are sold in the Philippines ~n the condition as imported,
then, if the importer so requests, the dutiable value shall be
based on the unit price at which the imported goods, after
further processing, are sold in the greatest aggregate quantity
to persons in the Philippines who are not related to the persons
from whom they buy such goods, subject to allowance for the

Page· 18 of 40 - CAO No. C,-J,o.2,0

if
~ MASTER COPY
value added by such processing and deductions provided under
subsections a to d hereof. 66

4.9.15. «:om!P)[Link] ~ial~Me fi\lilet!hlod 1Fh1e. Where the dutiable value

cannot be determined under the preceding method, the dutiable

value shall be the computed value of the sum of:

;ai. The cost or the value of materials and fabrication or other

processing employed in producing the imported goods;

lb). Toe amount for profit and general expenses equal to that
usually reflected in the sale of goods of the same class or
kind as the goods being valued which are made by producers
in the country of exportation for export to the Philippines;

c. The freight, insurance fees and other transportation

expenses for the importation of the goods;

~- Any assist, if its value is not included under subsection a

hereof; and

ie. The cost of containers and packing, if their values are not
included under subsection a hereof.

The Bureau shall not require or compel any person not residing
in the Philippines to produce for examination, or to allow access
to, any account or other record for the purpose of determining
a computed value. However, information supplied by the
producer of the goods for the purposes of determining the
customs value may be verified in another country with the
agreement of the producer and provided that said producer will
give sufficient advance notice to the government of the country
in question and that the latter does not object to the
investigation.67

4.9.7. IFam,aclk VaOl!,ll<e - M<etlhlods Six. If the dutiable value cannot

be determined under the preceding methods described above,
it shall be determined by using other reasonable means and on
the basis of data available in the Philippines. If the importer so
requests, the importer shall be informed in writing of the
dutiable value determined under method six and the method
used to determine such value.

No dutiable value shall be determined under method six on the

basis of:

a. The selling price in the Philippines of goods produced in the

Philippines;

66 d CMTA, Title VII, Chapter 1, Section 704.

67 d CMTA, Title VII, Chapter 1, Section 705.

Page 19 of 40 - CAO No. q- ;2{),1,,0

er
~ MASTER COPY
lb>a A system that provides for the acceptance for customs
purposes of the higher of two (2) alternative values;
(C. The price of goods in the domestic market of the country of
exportation;

d. The cost of production, other than computed values, that

have been determined for identical or similar goods in
accordance with method five hereof;

e. The price of goods for export to a country other than the

Philippines;

ff. Minimum customs values; or

\91· Arbitrary or fictitious values. 68
4.10. Jucerta6nme011'c of tlilie AccMraq of ttll'aie Dedlall"ed 'Vail1Uie,69 The
Bureau has the right to ascertain the truth and accuracy of any
statement, document or declaration presented for customs valuation
purposes. When a declaration has been presented and when the Bureau
has reason to doubt the truth or accuracy of the particulars or of
documents produced in support of such declaration, it may ask the
importer to provide f urther explanation, including documents or other
evidence, that the declared value represents the total amount actually
paid or payable for the imported goods, adjusted in accordance with the
provisions of t his CAO.

If in the course of determining the dutiable value of imported goods, it

becomes necessary to delay the final determination of such dutiable
value, the importer shall nevertheless be able to secure the release of
the imported goods upon posting of a sufficient security in an amount
equivalent to the duties and taxes, if any, as may be determined subject
to the CAO on Dispute Settlement and Protest70, Provided, that
prohibited goods shall not be released under any circumstance.

If after receiving further information, or in the absence of a response,

the Bureau still has reasonable doubts on the t ruth or accuracy of the
declared value, it may deem that the customs value of the imported
goods cannot be determined under method one, without prejudice to an
importer's right to appeal pursuant to Section 1104, Chapter 1, Title XI
of the CMTA. Before taking a final decision, the Collector of Customs
shall communicate to the importer, in writing if requested, the grounds
for doubting the truth or accuracy of the particulars or documents
produced and give the importer a reasonable opportunity to respond.
When a final decision is made, the Bureau shall communicate its decision
and the grounds therefor in writing.

66 d CMTA, Title VII, Chapter 1, Section 706.

69 CMTA, Title VII, Chapter 1, Section 707.
70
d. CAO No. 02-2020 on " Dispute Settlement and Protest"

Page 20 of 40 - CAO No. Cj- J.o.:2-0

~ ASTER COPY
~.:ll.:il. om Clla!$Sa1fliailcocll1l. Classification of goods and its tariff
IR1.l!Bfll!$
nomenclature shall be governed by the fol!o1Ning principles under
the General Rules for the Interpretation {GRI):
4.11.1, Rule Onl!! (1). The titles of sections, chapters and
subchapters are provided for easy reference only. For legal
purposes, classification shall be determined according to the
terms of the headings and any relative section or chapter notes
and, provided such headings or notes do not otherwise require,
according to the following provisions:
4.11.2. Rule Two {.2),
a. Rule 2(a) - any reference in a heading to the goods shall be
taken to include a reference to the same in their incomplete
or unfinished form or state: Provided, that the incomplete or
unfinished goods have the essential character, as presented,
of the complete or finished goods. It shall also be taken to
include a reference to the sameu in their complete or finished
form or state ( or falling to be classified as complete or
finished by virtue of this Rule), presented unassembled or
disassembled.

b. Rule 2(b) - any reff!rence in a heading to a material or

substance shall be taken to indude a reference to mixtures
or combinations of that material or substance with other
materials or substances. Any reference to goods of a given
material or substance shall be taken to include a reference to
goods consisting wholty or partly of such material or
substance. The classification of goods consisting of more
than one material or substance shall be according to the
principles of Rule 3.
4 .11.3. ![Link] Three {3). When by application of Rule 2(b) or for
any other reason, goods are, prima fade, classifiable under two
(2) or more headings, c!ass;fication shall be effected as follows:
a. Rule 3(a) - the heading which1 provides the most specific
description shall be preferred to headings providing a more
general description. However, when t\ivo (2) or more
headings each refer to part only of the materials or
substances contained in mixed or composite goods or to part
only of the items in a set put up for retail sale, those
headings are to be regarded as equally specific in relation to
those goods, even if one of them gives a more complete or
precise description of the goods.
II>. Rule 3(b) - mixtures, composite goods consisting of
different materials or made up of different components, and
goods put up in sets for retail sale, which cannot be classified

Page 21 of 40 - 0,0 No.

tff'
~ MASTER COPY
by reference to 3(a), shall be classified as if they consisted
of their essential character, insofar as this criterion is
applicable.
IC. Rule 3{c) - when goods cannot be classified by reference
to 3(a) or 3(b), they shall be classified under the heading
which occurs last in numerical order among those which
equally merit consideration;
4.1lL4. !Ru~ie FcMII' ( '6). Goods which cannot be classified in
accordance with the above Rules shall be classified under
the heading appropriate to the goods to which they are most
akin.
4-.11.S. Ruae fh1e (!5). In addition to the foregoing provisions, the
following Rules shall apply with respect to the goods referred
to therein:
a. Rule 5(a) - camera cases, musical instrument cases, gun
cases, drawing instrument cases, necklace cases and similar
containers, specially shaped or fitted to contain specific
goods or set of goods, suitable for long-term use and
presented with the goods for which they are intended, shall
be classified with such goods when of a kind normally sold
therewith. The Rule does not, however, apply to containers
which give the whole its essential character; and
lb. Rule S(b) - subject to the provisions of Rule 5(a), packing
materials and packing containers presented with the goods
therein shall be classified with the goods if they are of a kind
normally used for packing such goods. However, this
provision does not apply when such packlng materials or
packing containers are clearly suitable for repetitive use.

·4 ,11.6. Rule Six {6). For legal purposes, the classification of goods
in the subheadings of a heading shall be determined
according to the terms of those subheadings and any related
subheading notes and, mutatis mutandis, to the above Ru1es,
on the understanding that only subheadings at the same leveJ
are comparable. For the purposes of the Rule, the relative
section and Chapter Notes also apply, unless the context
othenNise requires.71
4.12, Ta15ff iNcmenieB:srt1111re a:rnd Rilltes of import IDlllti,. The provisions of
Section 104 on Rates of Import Duty of Presidential Decree No. 1464,
otherwise known as the Tariff and Customs Code of the Phili1Ppines of
1978, as amended, specifically providing for the tariff sections, chapters,
headings and subheadings and the rates of import duty, shall still appJy
and shall supplement the CMTA. There_shall be levied, coJlected and paid

71
d CMTA, Title X\/1, Chapter 3, Section 1610.

Page 22 of 40 - CAO No. __q_-_

. lo
_ .W_
h ASTERCOP'/
upon all imported goods the rates of duty indicated thereon except as
otherwise specifically provided for in the CMTA: Provided, that the
maximum rate shall not exceed one [Link] per cent ( 100%) ad
valorem.

The rates of duty provided or subsequently fixed pursuant to Sections

1608 and 1609, Chapter 2, Title XVI of the CMTA shall be subject to
periodic investigation by the Tariff Commission and may be revised by
the President, upon the recommendation of the National Economic
Development Authority (NEDA).
It shall also apply to all products, whether imported directly or indirectly,
of all foreign countries, which do not discriminate against Philippine
export products. An additional one hundred per cent {100%) across-the-
board duty shall be levied on the products of any foreign country which
discriminates against Philippine export products.72

4.13. Rate of ExchariJge. For the assessment and collection of customs duty
on imported goods and for other purposes, the value of the goods quoted
in foreign currency shall be converted into the currency of the Philippines
at the current rate of exchange specified or published, from time to time,
by the Bangko Sentral ng Pilipinas (BSP) and as circularized by the
Bureau. 73

4.14. Effactive Date of Rates of Import Duty. Imported goods shall be

subject to the import duty rates under the applicable tariff heading that
are effective at the date of importation or upon withdrawal from the
warehouse for consumption (i.e. upon lodgement of the goods
declaration for consumption). In case of withdrawal from free zones for
introduction to the customs territory, the duty rate at the time of
withdrawal shall be applicable on the goods originally admitted, whether
withdrawn in its original or advanced form.74

Semo!lll rs. Lodgement of Goods Declaratt;aoD'1.

5.1. Who may be a Declarant.75 A declarant is any person who
makes a goods declaration or in whcse name a goods declaration
is made, and may be:
S.1.1. The importer, being the holder of the BL or AWB;

s.1.2. A customs broker acting under the authority of the

importer or from a holder of the bill; or

72 cf. [Link], Title XVJ, Chapter 3, Section 1611.

73 cf. CMTA, Title VII, Chapter 1, Section 708.
;•., cf. CMTA, Title I, Chapter 2, SectJon 105, pt paragraph.
i'S d . OITA, Tlt}e I, Chapter 2, Section 106.

Page 23 of 40 - CAO !'lo. q-:[Link]

<ff
~ MASTER COPY
:$.:11..3. A person duly empowered to act as agent or attorney-in-
fact for each holder of the bill consistent with international
standards and customs best practices.

5.2. In case the importer is a juridical person, a responsible officer

who must be an official of the business, shall be authorized to
sign the goods declaration as declarant on its behalf.
s .2.1. For corporations, the responsible officer must be
authorized by the Board of Directors to sign as the
declarant on its behalf, as shown by the corporate
secretary's certificate.

S.2.2. For partnerships, the responsible officer must be

authorized by the partners, as shown by the certification
of the managing partner.

5.2.3. For sole proprietorships, the declarant may be the owner

or a responsjble officer of the business authorized under
oath by the 01Nner.

5.3. lruglhtts a:rnd 1Rmipo1J11solbmt:oes of ti'oe Dec:la11ra111fc.76 The

declarant shall be responsible for the accuracy of the goods
declaration and for the payment of all duties, taxes and other
charges due on the imported goods.
The Customs Broker shall likewise be responsible for the accuracy
of the goods declaration but shall not be responsible for the
payment of duties, taxes and other charges due on the imported
goods. 77
The deciarant shail sign the goods declaration, even when
assisted by a Customs Broker, who shall likewise sign the goods
declaration.
5.4. Electronic [Link]:merit,78 No entry of imported goods shall be
allowed unless the goods dedaration has been lodged with the
Bureau. All goods declaration shall be lodged through the BOC
portal which allows the declarant to accomplish, submit and
register gcods declaration online at anytime, anywhere following
a prescribed format.
S.S. Pericd wi'tm:m \Vihk:.'h t ,o lodge. Goods declaration must be
lodged within fifteen (15) calendar days from the dat-e of
discharge of the last package from the vessel or aircraft. Toe

76
cf. CMTA, Title I, Chapter 2, SecUcn 107; -d RKC, General Annex, Chapter 3(b} "The declarant'',
Section 3.8.
77
cf. Republic Act ~o. 9280, Article IV, Secticn 30.
7-S cf. RKC, General Annex, Chapter 3(.a) '-'The <:ceiods aedaration", Section 3.11 .and 3(b) Section 3 .2l .

Page 24 of 40 - CAO No.

&
~ ASTER COPY
period for the lodgement of the goods declaration may be
adjusted by the Commissioner.

The period to lodge the goods declaration may, upon written

request, be extended on valid grounds for another fifteen (15)
calendar days subject to the approval of the Collector of Customs,
as may be authorized by the Commissioner. Provided1 that the
request is made before the expiration of the original period within
which to lodge the goods declaration and is based on the
following grounds: 79

a. Fraud committed against the owner, import,e r or consignee;

b. Accident;
c. Mistake
d. Excusable negligence;
a, Force Majeure;
f. Technical issues as certified by the Management Information
System Technology Group (MISTG);
g. Other analogous circumstances.
Request for extension shall be acted upon within seven (7)
working days otherwise the request for extension shall he deemed
approved.80 The 15-day extension period to lodge the goods
declaration shall retroact to the day immediately after the
expiration of the original period. No further extension shall be
allowed.

The right to request for an extension to lodge a goods declaration

before the expiration of the original period, if applicable, shall be
without prejudice to the option of the importer to lodge
provisional goods declaration.

Sa5. Advance Lodgiement and CDearain«:e."11 The Bureau shall

develop a facility to enable the lodgement and dearance of goods
declaration prior to the arrival of the goods, i.e., express
shipments, or for those enrolled in any of the trade fadlitation
programs of the Bureau, i.e. Super Green Lane {SGL) Program,
Authorized Economic Operator (AEO) Program, and Bulk and
Break Bulk Cargo Clearance and Enhancement Program
(BBBCCEP).

!5.1. fcrrm:s and Ty(Pes off Good:s [Link].

~.[Link]. . Goodi !Dedar.a!tier.i [Link] tcm:wmpltijc!Jn.82 Goods of
commercial nature with FOB or FCA value of Fifty
Thousand Pesos (PhpS0,000.00) and above shall be

79 cf. CMTA, Title 'N, Chapter 1, 5€<:tion 407, 3rd paragraph; cf RKC, [Link]! Anne).(, Chapter 3(\:1)
'·'Tr.e Goods [Link]", Sections 3.23 and 3.24.
00 Republic Act No. 11032 "Ease of Doing Busine-ss Act", Section 9 (b){l)
91 cf. Cl\'ITA, Title IV, Chapter 1, Section 409,
a2 cf. CMTA, Title IV, Chapter 1, Section 402.

P~e 25 of 40 - CAO Mo. 4- 20:20

(!
~ ASTER COPY
entered through a goods declaration for consumption and
cleared under the Formal Entry Process.

5.7.2. lilec~airailso0'1l (l)f G«.tCd$ idln.:aiic §~ ?aiut !for CcnsOJmpicion

,u11d Ji>all"lt for Wairs;-n<0M$Ou1J\9. Goods covered by one (1)
BL or AWB which are meant in part for consumption and
in part for warehousing may bot h be entered
simultaneously for release at t he Port of Entry.83

5.7.3. Contents of Gccds iD>ieclarattgoll1l. Except as otl1erwise

provided for in Section 5.7.5 of this CAO covering the
rules on provisional goods declaration, all goods
declaration shall contain the following:

a. Name of consignee;

b. Name of the importing vessel or aircraft;

c. Country of origin;
d. Port of departure;
e. Port of destination;
f. Date of arrival;

g. The number and marks of packages, or the quantity,

if in bulk;
h. The nature and correct commodity description of the
goods contained therein.84
The description of goods in the goods declaration
must be sufficient and specific in detail to enable the
goods to be identified for customs valuation,
statistical purposes, and classification to the
appropriate tariff heading and subheading, and in
such other particulars necessary for the proper
assessment and coUscticn of duties and taxes. The
quantity and value of each of the several classes of
goods shall be separately declared according to their
respective headings and subheadings and the totals
of each heading .and subheading shall be duly
shown. 85

o. The value of the goods for customs valuation

purposes. This may include goods imported but not

03 cf. CMTA, Title IV, Chapter 1, Section 410.

84 cf. CMTA, Title IV, Chapter 1, SEction 411; cf. RXC, General Annex, Chai;ter 3(a) "The Goods
declaration, Section 3.12.
85 cf. CMTA, Tit le lV, Chapter l , Section 413; cf. CAO No. 08-2r.07 c-n "DE&ript\on of lmported

Articles in Tariff Terms".

Page 26 of 40 - CAO No. q-U>-2-0

~ ASTER COPY
covered by sale, such as goods on consignment or
lease, samples, or donations, covered by a
consignment, pro forma invoice, or other non-
commercial invoice.

j. The quantities in the weights or measures of the

goods shipped;

lk. Adjustments, as may be required in determining the

transaction value;86 and

9. Such other information as may be required by rules

and regulations.87

5~7,4, Stait<ements to be p!rovadsd Jn t he IGioods

Oedaratio!l'D. The goods declaration shall, under
penalties of falsification or peljury, contain the following
statements:

a. The invoice and goods declaration contain an

accurate and faithful account of the prices paid or
payable for the goods, and other adjustments to the
price actually paid or payable, and that nothing has
been omitted therefrom or concealed; and
b. To the best of the declarant's information and belief,
all the invoices and BLs or AWBs relating to the goods
are the only ones in existence and that these
documents are in the same state as when they were
raceived by the decJarant, and the declaration
t hereon are in all respects genuine an<! true.38

It shall be the responsibility of the declarant to

disclose and declare all relevant and applicabl1e data
and Information in order to determine the proper
duties, taxes and other charges due and payable.89

5.7 .5. Pro~asaonal Goods Dedal!'ation.90 Provisional goods

declaration may be allowed in order to facilitate trade and
to prevent goods from being declared abandoned. The
Bureau shall assign a specific code to identify that the
goods declaration is provisional in nature upon
lodgement. Goods declaration shall be considered full and
complete insofar as supporting documents and

86
cf. CMTA, Title IV, Chapter 1, Section 414.
87
ct. CMTA, Title IV, Chapter 1, Section 411.
88 ct. CMTA, Title IV, Chapter 1, Section 412, p t paragraph, subparagraphs a and b.
39 cf. CMTA, Title I, Chapter 2, SE!\..
'iion 107.
90
ct. CMTA, Title IV, Chapter 1, Section 403; cf. RKC, General Annex, Chapter 3(a) "Goods
declaration format and contents", Section 3.13.

Page 27 of 40 - CAO No. 1- J,D,;i()

CY
r MASTER COPY
information are concerned if the declarant does not
indicate the provisional nature of such lodgement.

ai. Lodgement of provisional goods declaration may be

allowed in the following circumstances:
i. When no regulatory permit, clearance or license
has been presented at the time of lodgement,
provided that the importer has timely filed his
application for such permit, clearance or license
pursuant to the policy of the concerned regulatory
agency;
ii. In case of relief consignment; 91
m. When the TEI has not been issued, provided an
application has already been filed at the time of
lodgement; or
iv. Any other situation where the declarant lacks
certain information or document to make a
complete goods declaration provided it is not due
to the declarant's negligence or fault.
b. Lodgement of provisional goods declaration may be
allowed provided the following dccuments are
presented:
i. Proforma invoice;
ii. Duly endorsed BL or AWB, or in the absence
thereof, a written ord,er by the carrier or agent of
the vessel or aircraft;
m. Advanced copies of Certificate of Origin, if
applicable;
iv. Duly notarized undertaking by the declarant that
the other supporting documents required
pursuant to this CAO [Link] be submitted within
forty-five (45) calendar days from lodgement of
provisional goods declaration. The 45-day period
may be extended for another 45 calendar days for
valid reasons upon approval of the lJVritten
request by the Collector of Customs.92
Request for e.'l<tension shall be acted upon within
seven (7) working days otherJ\/ise the request for

"1 CMTA, Title I, Chapter 4, Section 120.

92 cf. CMTA, Title IV, Chapter 1, Section 403, 1st paragraph; cf. RKC, General Annex,, Chapter 3(b)
"The Goods declaration", Section 3. 17.

~ e 28 of 40 - CAO No.
~ MASTER COPY
extension shall be deemed approved.93 The 45-
day extension period to submit the required
documents shall retroact to the day immediately
after the expiration of the original period. No
further extension shall be allowed.
The original grounds for filing a provisional goods
declaration should be the same reasons for the
extension of the period to submit the required
document. Further, the request for extension of
period to submit the required documents shall be
under pain of falsification for untruthful narration
of facts; and
'!i. Other documents as may be found necessary by
the Bureau.
cc. Effects of provisional goods declaration.
t If the Collector of Customs accepts a provisional
goods declaration, the dutv and tax treatment of
the goods shall not be different from that of
goods with complete declaration; 94
ii. Tentative assessment of duties, taxes and other
charges on goods covered by a provisional goods
declaration shall be completed upon final
readjustment and submission by the declarant of
the additional information or documentation
required to complete the goods declaration within
forty-five ( 45) calendar days from the lodgement
of the provisional goods declaration, subject to
extension period of another forty-five (45)
calendar days for valid reasons; 95
d. The conditional release of goods under provisional
goods declaration shall be governed by the following
rul-es:
i. In case of regulated shipments, the conditional
release of goods shall not be permitted unless the
regulatory agency concerned allows96 such
release subject to the following conditions:

93 Republic Act No. 11032 "Ease of Doing Business Act", Section 9 (b)(l)
cf. CMTA, Title 1V, Chapter 1, Section 403, 2nd paragraph; d. RKC, General Annex, Chapter 3(0)"
\''4
The Goods declaration", Section 3.14.
95
cf. CMTA, Title IV, Chapter 3, Section 426.
% In cases where regulatory agency through its existing regulations allows the submission of permit,
clearance or license after arrival of t he goods but prior to release from customs custody, e.g., Bureau
of Internal Revenue (BIR) Authority To Release Imported Goods (ATRIG), Bureau of Product
St andard {BPS) Import Commodity Clearance (ICC), illa'tional Telecommunications Convnission (NTC)

(/age 29 of 40 - CAO No.

~ MASTER COPY
1. Goods shall be delivered to the importer's
premises for storage and shall not be
disposed until the required permit, clearance
or license is issued and submitted to the
Bureau within the prescribed period; and
l. A specific and sufficient security97 shall be
required to cover the duties, taxes and other
charges of the goods except in case of
importers enrolled in any of the trade
facilitation programs of the Bureau where a
general security98 or an undertaking may be
required in lieu of a security.
in. In all other casas, the conditional release of goods
provisionally declared shall be subject to the
following rules:
1. A specific and sufficient s,ecurity99 shall be
required to cover the amount of duties, taxes
and other charges that shall be collected
when th~ lacking information or document is
not submitted within the prescribed period.
2. In case of highly compliant importers such as
those enrolled in any of the trade facilitation
programs of the Bureau or when the ground
for provisional goods declaration does not
affect the final computation of duties, taxes
and other charges, no s,ecurity shall be
required for the conditional release of the
goods.

e. Effects of the non-compliance with the conditions for

the release of goods under provisional goods
declaration.
i. In case the declarant fails to submit the required
permit, clearance or license from the regulatory
agency within the prescribed period, the
regulated goods shaH be subject to seizure,
provided due notice is given to the declarant.
ii. In case of release under the provisional goods
declaration due to the lack of import documents
to assess the correct duties, taxes and other
charges, any security posted or undertaking

97
cf. CMTA, Title XV, Section 1507.
98 cf. CMTA, Title XV, Section 1506.
99
cf. CMTA, Title XV, Section 1507.

Page 30 of 40 - CAO No. q-.z-02,o

~ ASTER COPY
submitted shall be subject to forfeiture for failure
of the declarant to submit the required supporting
documents or informatio11 within the prescribed
period; Provided that due notice is given to the
declarant, and without prejudice to any other
legal remedy to recover duties, taxes and other
charges that may be due on the importation.

S.7.6. Am;[Link]\t of ~ cods D.e darat~on by Dedarant. A

declarant may amend the goods declaration that has
already been lodged, provided, that the request to amend
the goods declaration, together with the intended
amendments, must be received prior to final assessment
or examination of goods.1co

Amendment of the goods declaration may be allowed

based on the following grounds:
a. Inadvertent error;
b. Amendment of e-JFCM; or
c. Mistakes or omissions in good faith in the lodgement
of the goods declaration without any fraudulent
intent.
Section 5. :examination.
6.1. AppBicatgcn of iRoslk Mall'[Link]. The Bureau shall apply risk
management in determining the nature and level of risks of
imports using selectivity parameters as may be determined by the
Bureau.

:6.2. £xaminataon ot1 Goods. Examination of goods, when required

by the Bureau, shall be conducted immediately after the goods
declaration has been lodged.

6.3. Types of Examjnatacn ,r/! Goo-as.

5.3 .1. Documentary check or the verification of completeness
and authenticity 0-f documents including submission of the
required import permits,, clearances o.r licenses, if any.

6.3.2. Non-intrusive inspection or the inspfction by use of }<-ray

scanners or any other non-intrusive equipment. 101

6.3.3. Physical examination of the goods to ascertain that the

actual miture, origqn, condition, quantity, value and tariff

Ico cf. Cl\lTA, Title IV, Chapter 1, Section 408; cf RKC., Gemiiral Annex,. Chapter 3(b) "The Goods
declaration", Section 3.27.
1.:n cf. CMTA, Title IV, Chapter 2, Section 420, 1s.1 paragra;,h.

Page 31 cf 40 - CAO No.

~ ASTER COPY
classification of the goods are in accordance with the
particulars declared in the goods declaration.102

16./41.. !P}lhl'tfSiC/all lEl<aBll1l1lDllllcilliticrl'il off Good!i.

~.4.11.. Gro!Ulrrildls for the Conduct of O,Q1rw$ical
fxaminatioim.103

icl. The goods are electronically selected for physical

examination;
b. The goods are subject bf an Alert Order issued by the
competent authority;
c. When the goods declaration is selected for
documentary check only but there are issues and
controversies surrounding the goods declaration and
the import clearance process;
d.. It is directed in writing by the Commissioner on
account of a derogatory information, in which case
the shipment is considered alerted or subject to pre-
lodgement control of the Bureau;
e. The importer or declarant requests for the
examination of the goods; or
f. When the image result after non-intrusive inspection
raises suspicion of irregularity that requires further
physical examination.
6.4.2. R.2quest forr Examination by the Importer ,o r
Dedara!i'11t. The importer or declarant may request the
.physical examination of the goods in the following
instances:

a. Prior to lodgement of goods declaration, t1pon

justifiable grounds, as may be determined by the
Commissioner; or
lb. After lodgement of goods declaration, when there ar,e
issues and controversies surrounding the goods
declaration and import clearance process, unless the
shipment is selected for physical examinaticn 01 is
subject of an Alert Order.
The request for e)(amination shall be made in good f,aith
and the expenses thereof shall be borne by the import,er.
In case the request is made to cover up any violation of
the CMTA or other rules and regulations implemented by
102 d. RKC, General [Link], Chap~er 2 "Definitions", E17/f 27.
103 cf. CMTA, Title IV, Chapter 2, Section 420.

Page 3.2 of 40 - CAO No.

(:fr
~ ASTER COPY
the Bureau, the importer shall be subject to penalties
and/or seizure and forfeiture as provided under the
CMTA.
6.4.3. CcncllMct of Plhlwsa«:aBie)tamoll1laiil:a«:))111l.

ai. The Bureau shall ensure that the conduct of physical

examination of goods shall be done in the correct and
expeditious manner with due consideration to the
surrounding circumstances. Priority in the
examjnation shall be given to live animals, perishable
goods and other goods requiring immediate
examination.
b. The Bureau may require the declarant to be present
or to be represented at the examination of the goods
or to render any assistance necessary to facilitate the
examination.
c. Whenever necessary, a system of coordination and
joint examination of goods shall be established by the
Bureau and other regulatory agencies under existing
laws and regulations. 104
d. The extent of the physical examination shall depend
on whether the goods are containerized, bulk or break
bulk, loose, refrigerated, in lcquid or solid form, in
crates or special containers, to he discharged at the
pier or for shfpside transfer, dangerous, and such
other [Link] which may be hazardous to the
health and safety of those conducting the
examination.
e. The Bureau shall take samples of the goods only
when needed to establish the tariff description and
value of goods dedarecl'or to ensure compliance with
the CMTA. Samples drawn shall be as minimal as
possible. 105
f. When the Bureau requires laboratory analysis of
samples, detailed technical documents or expert
advice, it may release the goods before the results of

tc-4 d. CMTA, Title lV, Chapter 1, Section 419, :zr.d paragraph; cf RKC, [Link]! Anr~e:<, Chapter 3(a)
''"Time req1.:ired i or examination of goods", Sections 3.33 to 3.35 and [Link] 3{b) "Presence of
deciarant at examination of goods", Sections 3.36 to 3.37.
105 cf. CMTA, Title r.v, Chapter 1, Section 419, last paragraph; cf RKC, General Annex, Chapter 3(c)

"Sampling by Customs", Section 3.38.

Page 33 of 40 - CAO No.

~ ASTER COPY
such examination are known after posting of
sufficient security by the declarant. 106
(Di.&}.~. iF>!h!V!SikaO fE~arnollllaJttDO'lll Bll1l (tlhli:e Abseracs o1f ith.a
IO??C!ara3'llt @r il'llus ID)11J18'tf AilBtffllora~ed Reg:me:sentateve.
In exceptional circumstances, physical examination of
goods in the absence of the declarant or authorized
representative may be allowed under the following valid
and justifiable grounds:

a. Despite due notice, the declarant or his authorized

representative fails to be physically present;

b. Unknown or fictitious consignee; or

c. Conduct of controlled delivery, subject to the approval

of the Commissioner •107

The conduct of physical examination shall be under the

authority of the Collector of Customs. The Office of the
Commissioner and concerned offices must be informed of
the date, time and place of the scheduled examination to
witness the said examination.
In all cases of physical examination under this section, the
Bureau shall take the necessary steps to ensure that the
entire proceeding is captured on video for documentation
and record-keeping purposes.
6.,4.5. Examinatit)r.i at Coinsqgnee's Premises or
Warehca.i~. Physical examination of an alerted
shipment shall be conducted at consignee's warehouse or
premises in cases when the importation is consigned to
an importer enrolled in any of the trade facilitation
programs of the Bureau. In case where the Bureau does
not have the necessary facility to conduct the examination
without causing damage to the shipment, the
e}(amination may be conducted at the consignee's
warehouse or special facility, subject to the conditions as
may be imposed by the Bureau. Examination of bulk and
break-bulk shipment shall he examined pursuant to the
Rules on Bulk and Break-bulk Cargo Clearance
Enhancement Program (BBCCEP).

1c6 cf. CMTA, Title N , Chapter 3, Section 431; cf. RKCJ Ger..?raJ Annex, Chapter 3 "Release of goods",
Section 3.42.
107 CAO No. 03-2019 Custom5 Jurisdiction ar.d Exercise of Police Authority, Section 4.8

&__,
Page 34 of 40 - CAO No.
~MASTER COPY
6.4.6. ID>11.1ties o1f Customs Offi~ir 'lfaislked i:<0> IE1taimolllls ll:lhlie
lrm ~rte(dl Go~«.is. In the examination, classification, and
valuation of the goods, the customs officer shall:

a. Determine whether the packages for examination and

their contents are in accordance 1Nith the goods
declaration, invoice and other pertinent documents;
b. Take samples of the imported goods for ,examination
or laboratory analysis when necessary;

c. Acknowledge and sign a receipt for any sample taken

and retained during examination; and
d. Report whether the goods have be-en ,corr,ectly
declared as to value, quantity, measurement, weight,
tariff classification, and not import,ad contrary to law.
Failure on the part of the customs officer to perform the
above duties shall be penalized in accordance with Section
1431, Chapter 2, Title XIV of the CMTA. 100
5,-4.7. Calstoms Expenses Constit uti~g Clhargs on Gcods.
The cost of examination shall be for the account of the
importer. All expenses incurred by the Bureau for the
handling or storage of goods and other necessary
operations shall be chargeable against the goods, and
shall constitute a lien thereon .109

Section 7. Assessment.
il.1. For purposes of assessing duties1 taxes and other
b\s$e5Sfltl'l(9111t.
charges on imported goods, the customs officer shall d assify,
value, and determine the duties, taxes and other charges to be
paid. The customs officer shall prepare and submit an assessment
report as established under the CMTA.110
:1..1. Tentati'W! Assessment. Assessment shaJI be dieem~ tentative
when:

1.2.1. Assessment is based on a provisional goods declaration

filed by the declarant.

The assessment shall be completed upon final

readjustment and submission by the declarant of the
additional information or documentation required to

103d. CMTA, TIU: 1V, Cl"apter 2, Section 421.

i G9
cf. CMTA, Title 'N, Chapter 2, Section 422.
uo d. CMTA, Title ]V, [Link] 3, Section 424.

Page 35 of 40 - CAO No.

& I
r MASTER COPY
complete the goods declaration within the prescribed
period. 111

7 .2.2. The duties and taxes initially assessed are subject of a

valid dispute 011 the grounds of valuation, tariff
classification issues, rules of origin or protest case
involving the same, and other customs issues.

The assessment shall be completed upon final

readjustment based 'on the resolution of the disputed
issues. 112

1 .3. Completed A\i1S.Ss1Sme11nt. The Bureau shall issue Final

Assessment Notice (FAN) to the importer signifying that t he
assessment is complete. The FAN shall serve as payment
instruction to the AAB to debit the amount of duties, taxes and
other charges from the account of the importer. Assessment shall
be deemed final fifteen {15) calendar days after receipt of the AN
by the owner, importer or consignee. 113

Sectioil'll 8 . Payment.

8.1. Mode of Paymsnt a111d Tiarrms of Trade. Subject to existing

laws and rules on foreign currency exchange, the internationally
accepted standards and practices on the mode of payment or
remittance covering import transactions, induding standards
developed by intemationa_l trading bodies such as the
International Chamber of Commerce {ICC) on trading terms
(incoterms) aoo on international letters of credit such as the
Uniform Customs and Practice for Documentary Credits (UCPDC)
shall be recognized. 114
8.2. Payment. Customs duties, taxes and other charges payable can
only be paid through the following modes:

s.2.1. Cash payment through debit from the importer's

nominated account/s in an AAB.

Anes, surcharges and other charges must be paid in cash

unless allowed under the efectronic payment system.
8.2.2. Non-cash payment throug~ any of the following :
a. TDM tS5Ued by the BOC.
AABs shall not accept TCCs as payment for customs
duties and taxes.

u cf. CMTA, ntle IV, Chapter 3, Section 426.

11.1
cf. CMTA, Title IV, Chapter 3, Section ·425.
m cf. CMTA, Title IV, Chapter 3, Section 429.
11· 1 cf. CMTA, Title IV, Chapter 1, Section 415.

Page 36 of 40 - CAO No. q- J-OW

rt
~ ASTER COPY
lb. DPGA.
Procedures for the non-cash payments through TCCs,
TDMs or DPGA shall be governed by separate
regulations to be issued by the Commissioner.
Letter of credit requiring the deposit of the fuli amount of duties
due on importation shall no longer be required except when
otherwise required for certain commodities.115
15.3. !Foll1lai0 IP>a,tms1J1J!l: fior <Caslhl ?~vmslT1ltl:, The final payment will be
debited by the concerned AAB from the designated debit account
upon receipt of the final payment instruction from the Bureau via
the electronic payment portal, subject to the bank's confirmation
and security procedures for payment instructions. 116
is.~. T1ra:rni!imntt~U off IF>aym~rrnlt Coirnffurma1tooil1. In all cases of cash
payment instruction received from the Bureau's customs cargo
clearance system, the AABs should complete the collection and
thereafter transmit a payment confirmation to the electronic
payment portal unless there is no sufficient balance in the debit
account. 117
8.5. Abaindo11111rll'.leJ111t. If no payment confirmation is received within
fifteen (15) calendar days from the date of receipt by the AAB of
the payment instruction, then the importer or consignee shall be
deemed to have failed to claim his importation after lodging the
goods declaration rendering the same liable to abandonment. 113
8.i5. IL~au I1111t ell"esfc for 1UJ111paid DMties, Taxes [Link] Oltlileir
C!ha~s. Unpaid duties, ta,ces and other charges, shall incur a
1

legal interest of twenty per cent (20%) per annum computed

from the date of final assessment under Section 7.3. of this CAO,
when payment becomes due and demandable. The legal interest
shall likewise accrue on any fine or penalty imposed.
Upon payment of the duties, taxes and other charges, the Bureau
shall issue the necessary receipt or document as proof of such
payment. 119
Sectioll'll 9. aieUeae.

~.1. ![Link]!1!!ial$<! «j(f lirm:JIP)Ort~ GcoCII$.

~.[Link]. iReUea~ cf Gccds 11J11111iil!er tlhle 0 111- Ull1l(B !Reiln~ie
svsttlerm {OlRS). Goods shall be released only after

115 CMTA, Title XVIII, S€ction 1803.

116
cf. CAO No. 10-2008 on "Pa·yment App):caticn Secure Syst~m Vl?rsion 5.0 {PASS5), Sc:ctk,n 4.2.3,
last sentence.
117 cf. CAO l\lo. 10-2008 on "Payment Application Secure System Version 5.0 (PASSS), Section 4.2.4.
118
d. CAO No. 10-2008 on "Payment Application Secure System Version 5.0 (PASS5), Section 4.2.5.
119
d. CMTA, Title I , Chapter 2, Section 104, 2nd and 3rd paragraphs.

Page 37 of 40- CAO Mc.

I
I,
~ MASTER COPY
payment of duties, taxes and other charges, or posting
of appropriate security covering the same, in case of
tentative release by reason of tentative assessment
including any fine or surcharge, if applicable, and all
pertinent rules and regulations have been complied
with. 120 The Bureau shall electronically transmit the
release instructions via Online Release System (OLRS)
to the terminal facility, off-dock or off-terminal CFW
operator, for the delivery of the goods to the
consignee. 121

9.1.2. Release of Goocll$ wattihlctuJtt fP>ro(dlllJldticau of sm of

Lading or Aor Wa,rbm. No customs officer shall clear
the goods for delivery to any person without the
submission of the BL or AWB covering the goods,
except on written order of the carrier or agent of the
vessel or aircraft, in which case neither the government
nor the customs officer shall be held liable for any
damage arising from wrongful delivery of the goods;
Provided, that when the clearance for the delivery of
goods Is made against such written order, the customs
officer shall require the submission of a copy of the
bill.122

9.1.3. Release of Goods upcirn Oll'dell' of Importer. An

importer may issue a written authorization for the
release of goods stored in a customs facility warehouse
to another person. Such authorization shall not relieve
the importer from liability for duties, taxes and other
charges due on the goods unless the person to whom
the release was authorized assumes such liability, 123 as
evidenced by a written agreement between the
importer and his assignee.

9.1.4. Withholding 1Re~ea$e c1f Goods Piendi111g

Satisfactio1111 of 1Lie1111. When the Collector of Customs
is duly notified throijgh a lawful order of a competent
court of a lien for freight, lighterage or general average
upon any imported goods, the Collector of Customs
shall withhold the release of the goods unless the claim
has been paid or secured. In case of disagreement,
the Collector of Customs may release the goods after
payment of the freight and lighterage due on the
quantity or weight landed as actually det ermined. 124

120 cf. CMTA, Tit!e IV, Chapter 3, Sections 431, pt sentence and 436.
121 cf. Manual on cargo Clearance Procedure, page 42.
122 cf. CMTA, Title IV, Chapter 3, Section 433.
123 cf. CMTA, Title IV, Chapter 3, Section 434.

n , cf, CMTA, Title IV, Chapter 3, Section 435.

F 38of40-CAONo.
~ ASTER COPY
\[Link]..!S. !i\¥@1lll•Uoail!Jmtw full" Mosdlem,err,r off Gooo~. Any
customs officer who releases goods to the consignee or
la11Jful holder of the BL or AWB shall not be liable for
any defect or irregularity in its negotiation unless the
customs officer has notice of the defect or
irregularity. 125
~.2. Post !Re~ease [Link]!Jj11B$tlnl'ilellilll: of Apjp>ll'aosal all1ld
CHassiflca~ion. Returns made by the customs officers that are
finally passed upon and approved or modified by the Collector of
Customs or Commissioner, shall not be altered except:

9.2.:il.. Within one (1) year after payment of the duties, upon
statement of error in conformity with Section 912,
Chapter 2, Title IX of the CMTA, as approved by the
Collector of Customs;
9.2.2-1 Within fifteen (15) calendar days after such payment,
upon request for reappraisal or reclassification
addres..c;ed to the Commissioner by the Collector of
Customs, if the appraisal or classification is deemed to
be low;
9.2.3. Upon request for reappraisal and/or reclassification, in
the form of a timely protest or dispute addressed to the
Collector of Customs by the interested party if the latter
should be dissatisfied with the appraisal or return; or
9.2.4. Upon demand by the Commissioner after the
completion of compliance audit. 126
9.3. Period c:f :Umjtta~oll'3. In the absence of fraud and when the
goods have been finally assessed and released, the assessment
shall be conclusive upon all parties three (3) years from the date
of final payment of duties and taxes, or upon completion of the
post clearance audit. 127
Section 10. Dispute MechairnJsm. Issues dealing on purely Valuation,
Classification, Rules of Origin, and other matters relating to the assessment of goods
shall be settled under dispute settlement and shall be governed by the CAO providing
for the rules on Dispute Settlement and Protest.
Section 11. Alert Orders. Valuation issues arising from the introduction of forged
or spurious document and other enforcement issues shall be subject of Alert Orders
and shall be governed by the provisions of CAO No. 07-2019.

Alert Orders may be issued by the Commissioner, District Collector or any customs
officer authorized in writing by the Commissioner.

125 cf. CMTA, Title IV, Chapter 3, Section 432.

126 cf. CMTA, Title IV, Chapter 3, Section 427.
127 cf. CMTA, Title IV, "Chapter 3, Section 430.

Page 39 of 40 - CAO No. q-2-o:ZO

rJr
~ STER COPY
I n cases when the importation is consigned to an importer enrolled in any of the trade
facilitat ion programs of the Bureau, only the Commissioner may issue an Alert Order.
The physical examination shall be conducted at consignee's warehouse or premises,
subject to conditions as may be imposed by the Bureau.

§iecticll1l 1l. jpiell1lai il»[Q~nsso8'1l. Any person who makes or attempts to lodge, process
and clear imported goods by means of false or fraudulent statements, including non-
disclosure in the Revised SDV Form in the existence of any relationship between the
buyer and the seller and payment of other costs that should be included in the price
paid or payable for the imported goods, shall be subject to sanctions and penalties
provided under Section 1401, Chapter 1, Title XIV of the CMTA and other applicable
penal provisions.

Seci:ooll1l 13. Trii!lll1l$Dtl:CIIJ:f 1J'>rolla$aon. Pending full implementation of a comprehensive

system that will admit and store electronic commercial documents, including
methodologies for authentication thereof, the existing procedure on the submission of
documentary requirements by the declarant shall apply. The Bureau shall accept the
submission of the documentary requirements herein stated.

Ssctno!lll 1~. IF>ericdoic !Review. Unless otherwise provided, this CAO shall be
reviewed every three (3) years and be amended or revised if necessary.

Sectoo1111 15. R.epea0i1111g Clause. This CAO specifically amends or repeals previously
issued CAOs and CMOs which are inconsistent with the provisions here stated.

Sectic1111 115. Sepaq:abmDofy C~ausce. If

any part of this CAO is declared
unconstitutional or contrary to existing laws, the other parts not so declared shall
remain in full force and effect.

S<ed:001111 11. IEOifectiyojty. This CAO shall take effect thirty (30) days from its
publication at the Official Gazette or a newspaper of national circulation.

The Office of National Administrative Register (ONAR) of the UP Law center shall be
provided t r (3) certified copies of this CAO.

!REY ILIEONA!RIDO la. <GIUIE!RRIERO

...,,commissioner of Customs . /
ftB 2v ZflD "
(!)'·=@
• BOC-02-01241
Approved :

~;l;,
«:A~ll..Ol~ G OO~iIIMG!lDfEZ
Secretary of Finance
MAR O6 20-20
Page 40 of 40 - CAO No.

Common questions