SECTION 436. Fine or Surcharge on Goods.
— Goods subject to any fine or surcharge shall
be released only after the payment of the fine or surcharge.
SECTION 600. Customs Transit in the Customs Territory.— Customs transit within the
customs territory shall be allowed for goods except those intended for consumption, to be
transported as follows:
(a) From port of entry to another port of entry as exit point for outright exportation;
(b) From port of entry to another port of entry or inland customs office;
(c) From inland customs office to a port of entry as exit point for outright exportation; and
(d) From one port of entry or inland customs office to another port of entry or inland
customs office.
A transit permit is required for goods transported under customs transit. However, transfer
of goods in customs transit from one means of transport to another shall be
allowed; Provided, That any customs seal or fastening is not broken or tampered.
The party responsible for the compliance of the obligations imposed on customs transit
shall ensure that the goods are presented intact and in due course at the customs office of
destination. Failure to comply with the aforementioned obligations or likewise failure to follow
a prescribed itinerary or period for delivery of the goods may immediately subject the goods
to the corresponding duties, taxes and other applicable fines, penalties, and surcharges.
SECTION 1131. Authority of the Commissioner to Make Compromise.— Subject to the
approval of the Secretary of Finance, the Commissioner may compromise any
administrative case arising under this Act involving the imposition of fines and surcharges,
including those arising from the conduct of a post clearance audit, unless otherwise
specified by law.
SECTION 1132. Remedies for the Collection of Duties, Taxes, Fines, Surcharges, Interests,
and Other Charges.— The civil remedies for the collection of import duties, taxes, fees, or
charges resulting from the conduct of a post clearance audit shall be obtained by:
(a) Distraint of goods, chattels, or effects, and other personal property of whatever
character, including stocks and other securities, debts, credits, bank accounts, and interest
in and rights to personal property, and by levy upon real property and interest in rights to
real property; and
(b) Civil or criminal action.
Either or both of these remedies may be pursued at the discretion of the Bureau; Provided,
That the remedies of distraint and levy shall not be allowed when the amount of duties and
taxes involved is not more than ten thousand pesos (₱10,000.00).
The Bureau shall advance the amounts needed to defray costs of collection by means of
civil or criminal action, including the preservation or transportation of personal property
distrained and the advertisement and sale thereof as well as of real property and
improvements thereon.
SECTION 1400. Misdeclaration, Misclassification, Undervaluation in Goods
Declaration.— Misdeclaration as to quantity, quality, description, weight, or measurement of
the goods, or misclassification through insufficient or wrong description of the goods or use
of wrong tariff heading resulting to a discrepancy in duty and tax to be paid between what is
legally determined upon assessment and what is declared, shall be subject to a surcharge
equivalent to two hundred fifty percent (250%) of the duty and tax due. No surcharge shall be
imposed when the discrepancy in duty is less than ten percent (10%), or when the declared
tariff heading is rejected in a formal customs dispute settlement process involving difficult or
highly technical question of tariff classification, or when the tariff classification declaration
relied on an official government ruling.
There is undervaluation when: (a) the declared value fails to disclose in frill the price actually
paid or payable or any dutiable adjustment to the price actually paid or payable; or (b) when
an incorrect valuation method is used or the valuation rules are not properly observed,
resulting in a discrepancy in duty and tax to be paid between what is legally determined as
the correct value against the declared value. When the undervaluation is established without
the need to go through the formal dispute settlement process provided for in this Act, a
surcharge shall be imposed equivalent to two hundred fifty percent (250%) of the duty and
tax due. No surcharge shall be imposed when the discrepancy in duty is less than ten percent
(10%), or the declared value is rejected as a result of an official ruling or decision under the
customs dispute settlement process involving difficult or highly technical question relating to
the application of customs valuation rules.
A discrepancy in duty and tax to be paid between what is legally determined and what is
declared amounting to more than thirty percent (30%) shall constitute a prima facie evidence
of fraud.
When the misdeclaration, misclassification or undervaluation is intentional or fraudulent,
such as when a false or altered document is submitted or when false statements or
information are knowingly made, a surcharge shall be imposed equivalent to five hundred
percent (500%) of the duty and tax due and that the goods shall be subject to seizure
regardless of the amount of the discrepancy without prejudice to the application of fines or
penalties provided under Section 1401 of this Act against the importer and other person or
persons who willfully participated in the fraudulent act.
SECTION 1402. Failure or Refusal of Party to Give Evidence or Submit Documents for
Assessment.—When the owner, importer or consignee of any imported goods, or the agent
of either, fails or refuses, upon lawful demand in writing by any customs officer to appear,
lawfully depose, or submit to examination or to answer any material question or refuses to
produce records, accounts or invoices in possession pertaining to the value, classification or
disposition of the goods in question and deemed material in assessing the same, the
District Collector shall assess a surcharge of twenty percent (20%) on the duffiffle value of
the goods which is the subject of the importation.
SECTION 1404. Failure to Declare Baggage.— Whenever dutiable goods are not declared
by any person arriving within the Philippines, such goods shall be seized and the person
may obtain release of such goods, if not imported contrary to any law, upon payment of a
surcharge equivalent to thirty percent (30%) of the landed cost of such goods, in addition to
all duties, taxes and other charges due. Nothing in this section shall preclude the filing of
criminal action against the offender.
SECTION 1422. Unauthorized Withdrawal of Imported Goods from Bonded
Warehouse.— Any person who causes the unauthorized withdrawal of imported goods
stored from a CBW shall be liable for payment of a surcharge of fifty percent (50%) of
duties, taxes, customs fees, and charges, found to be due and unpaid. The amount of
surcharge shall be added to the duties, taxes and charges due on the goods withdrawn. If
the delinquency lasts for more than one (1) year, the surcharge shall be increased by
twenty-five percent (25%) of the unpaid duties and taxes annually; Provided, That where the
withdrawal is attended with fraud, such as when a fake or altered withdrawal permit is
submitted, the warehouse operator shall be held liable under the pertinent provisions of this
Act, without prejudice to the suspension or revocation of the warehousing privileges granted
by the Bureau pursuant to this Act.
SECTION 1425. Failure to Pay Duties, Taxes and Other Charges.— For failure to pay the
duties, taxes and other charges of an assessment within fifteen (15) days from the date of
final assessment, a surcharge of ten percent (10%) of the total assessed amount or balance
thereon shall be added and collected, which surcharge shall be increased to twenty-five
percent (25%) if the delinquency lasts for more than one (1) year
