ALERT AND HOLD ORDER 4.

Magna Scale Weighing – weighing in of a large-scale The Commissioner may exempt from physical
container. examination the goods of authorized economic operators
Section 1111. Alert Orders. — Alert orders are or of those provided for under any existing trade
PURPOSE OF EXAMINATION facilitation program of the Bureau.
written orders issued by customs officers as
authorized by the Commissioner on the basis of 1. To protect government revenue against customs Physical examination, when required, shall be conducted
derogatory information regarding possible technicalities as to undervaluation, misclassification or in an expeditious manner.
noncompliance with this Act. misdeclaration of imported articles;
Section 416. Examination of Samples.— Customs officers
2. To protect public health against the entry of shall see to it that representative samples taken during
Alert Order – issued on a shipment if suspected to have
substandard, adulterated or unregistered food and examination shall be properly receipted for and retained
violated the tariff and customs laws
drugs; within a reasonable period of time. The quantity and
This shall also be the basis for further investigation, value of the samples taken shall be noted in the specified
3. To protect the consuming public from unsafe
issuance of Hold Order, and recommendation of WSD box of goods declaration or electronic form. Such
household equipment and other substandard home
when violation is confirmed. samples shall be duly labeled as will definitely identify
appliances and machinery;
them with the importation for which they are taken.
Hold Order – issued whenever there are confirmed
4. To protect local products or industry from the illegal
violations of tariff and customs laws. Section 421. Duties of Customs Officer Tasked to Examine
entry or unfair trade of imported products; and
the Imported Goods.— In the examination, classification,
AUTHORITY TO ISSUE ALERT & HOLD ORDERS:
5. To protect the public from the entry of fake or pirated and valuation of the goods, the customs officer shall:
1. Commissioner; goods.
(a) Determine whether the packages for
2. District Collector; Section 420. Conditions for Examination.— Pursuant to examination and their contents are in accordance with
internationally accepted standards, the Bureau may the goods declaration, invoice and other pertinent
3. Deputy Commissioner, Intelligence Group; adopt nonintrusive examination of goods, such as the documents;
use of x-ray machines.
4. Deputy Commissioner, Enforcement Group. (CMO 27 - (b) Take samples of the imported goods for
2010) Physical examination of the goods shall be conducted examination or laboratory analysis when necessary;
when:
TYPES OF EXAMINATION (c) Issue a receipt for a sample taken and
(a) It is directed by the Commissioner on retained during examination; and
1. Physical Examination of goods
account of a derogatory information;
(d) Report whether the goods have been
a. Spot-check or Random check – may be made
(b) The goods are subject to an Alert Order correctly declared as to value, quantity, measurement,
by Commissioner or Collector at any time;
issued by competent authority; weight, tariff classification and not imported contrary to
b. 100% Examination – subject of derogatory law.
(c) The goods are electronically selected for
information;
physical examination; Failure on the part of the customs officer to perform the
2. Documentary Examination – act of checking above duties shall be penalized according to Section 1431
(d) There are issues and controversies of Title XIV of this Act.
completeness, accuracy, authenticity of documents
surrounding the goods declaration and the import
attached to the import entry.
clearance process; or Section 422. Customs Expenses Constituting Charges on
3. Non-Intrusive Examination – done by X-Ray Inspection Goods.— The cost of examination shall be for the
(e) The importer or declarant requests for the account of the importer or exporter, subject to proper
Project (XIP)
examination of the goods. accounting and documentation. All expenses incurred by
the Bureau for the handling or storage of goods and
other necessary operations shall be chargeable against LAW ON SMUGGLING persons conspiring and/or confederating with one
the goods, and shall constitute a lien thereon. another in carrying out the lawful act of smuggling.
Smuggling - An act of any person who shall
SEC. 1400 Misdeclaration, Misclassification, fraudulently import or bring into the Philippines, UNLAWFUL IMPORTATION
Undervaluation in Goods Declaration or assist in so doing, any article contrary to law or Any person who shall:
shall receive, conceal, buy, sell or in any manner
Misdeclaration- as to quantity, quality, description, facilitate the transportation, concealment, or sale 1. Fraudulently import or bring into the Philippines; or
weight or measurement of the goods resulting to a of such article after importation, knowing the
discrepancy on duty and tax to be paid between what 2. Assist in so doing; or
same to have been imported contrary to law.
is legally determined upon assessment and what is
declared. It includes the exportation of articles in a manner
Intellectual Property Right- A right that is had by a
contrary to law.
person or by a company to have exclusive rights to
Misclassification- through insufficient or wrong KINDS OF SMUGGLING use its own plans, ideas, or other intangible assets
description of the goods or the use of wrong tariff without the worry of competition, at least for a
1. Pure Smuggling- an act whereby an article specific period of time. These rights can include
heading resulting to a discrepancy in duty and tax
sought to be imported or exported without copyrights, patents, trademarks, and trade secrets.
to be paid between what is legally determined
going through customs warehouse whether
upon assessment and what is declared. These rights may be enforced by a court via a lawsuit.
the act is consummated, frustrated, or
attempted. (Sec. 2530 subsection L no. 1 TCCP) 3. Receive, conceal, buy, sell; or
Undervaluation- when the declared value fails to
disclose in full the price actually paid or payable or 2. Technical Smuggling- an act whereby an article 4. In any in any manner facilitate the transportation,
any dutiable adjustment to the price actually paid is sought to be imported or exported through concealment or sale of such article after importation.
or payable, or when an incorrect valuation any practice or device contrary to law by
means of which such articles were entered  Any article, contrary to law, or Knowing the
method is used or the valuation rules are not same to have been imported contrary to law;
through the customshouse to the prejudice of
properly observed, resulting in a discrepancy in
the government. (sec. 2530 subsection L no. 5
duty and tax to be paid between what is legally Contrabands - Any property that it is illegal to produce or
TCCP, Sec. 2503 TCCP)
determined as the correct value against the possess. Smuggled goods that are imported into or
declared value, THREE STAGES OF SMUGGLING exported from a country in violation of its laws.

1. Attempted Intellectual property (IP) - refers to creations of the

SEC. 1401 Unlawful Importation or Exportation. .— Any
2. Frustrated mind, such as inventions; literary and artistic works;
person who shall fraudulently import or export or bring
into or outside of the Philippines any goods, or assist in designs; and symbols, names and images used in
3. Consummated commerce.
so doing, contrary to law, or shall receive, conceal, buy,
sell, or in any manner facilitate the transportation, TWO FORMS OF SMUGGLING UNDER EO 297
concealment, or sale of such goods after importation, or
shall commit technical smuggling as defined in this Act 1. Large Scale Smuggling – When acts contrary to Selectivity System
shall be penalized. customs laws involve the importation of goods or
contraband with a determinable value of at least five Selectivity- is the selection of either declarations or
million pesos (PHP 5,000,000) shipments for documentary and/or physical
examination based on certain criteria or profiles made
2. Smuggling committed by syndicate – shall be deemed
by the Risk Management Office of BOC.
committed when carried out by a group of three or more
Selectivity System (SEL) assessment profiling and in the updating of the Bureau‘s
Selectivity Screens , the RMG is transformed into the
Contains controls necessary to classify the processing of RMO under Office of the Commissioner (OCOM).
declarations and direct them to the appropriate
processing channels: FUNCTIONS:

 Green – released without further inspection; a. Review and update parameters of Selectivity Screen of
 Yellow – documentary check only; or the Selectivity System of BOC;
 Red – documentary check and physical
b. Ensure an efficient and secure information pipeline
examination.
from all sources to the RMO;
KEY FUNCTIONALITIES OF SELECTIVITY SYSTEM
c. Conduct a continuing study/profile of importers,
 Performs shipment selectivity according to exporters and customs brokers; and
parameters set by the BOC Risk Management
d. Maintain a database of all smuggling cases and related
Office (RMO);
data; and
 Capability to re-route selectivity status; and
 Acceptance of examiner ‘s findings and e. Recommend to the Commissioner of Customs policies
recommendations. and programs to increase efficiency and effectivity of the
BOC‟s Selectivity System.
RISK MANAGEMENT SYSTEM
RMO Composition
Risk Management- The identification, analysis,
1. Strategic Assessment Unit – The development and
assessment, control, and avoidance, minimization,
creation of policies for risk assessment which shall be
or elimination of unacceptable risks.
nationwide in scope.
EO 836 - Transforming the Risk Management Group
2. Research and Analysis Unit – The gathering of all
(RMG) of the Bureau of Customs into Risk Management
information relating to the improvement of the
Office (RMO)
Selectivity Screen such as records of all shipments
Risk Management Group is hereby transformed into Risk alerted, placed on hold, seized, forfeited, and/or finally
Management Office (RMO). (Sec 1) disposed of by BOC nationwide.

RMO is placed directly under the Commissioner of 3. Operational Risk Assessment Unit – To implement the
Customs, while its day-to-day operations shall be policies created and developed by the Strategic
managed by the Dep. Comm. Intelligence Group. (Sec.3) Assessment Unit in every port under the jurisdiction of
the Bureau of Customs.
NOTE: RMG ensures an efficient and secure pipeline of
information from all sources in compliance with the
principles of the World Customs Organization (WCO).

CAO 6-2009 - Transforming RMG into RMO (IRR of EO

836)

Objective: Recognizing the value of RMG‘s ever

expanding responsibility in risk management/