CUSTOMS MODERNIZATION

This bill will introduce amendments to harmonize with the Revised Kyoto Convention (RKC), specifically:

a. new provision authorizing Customs to establish temporary storage prior to goods declaration which will provide express legal basis to the creation of special warehouses.
b. period within which to file entry is 15 days extendible to another 15 days
c. penalty on failure to pay correct taxes and duties fixed at 50% on deficiency on duties, taxes and other charges and 100% landed cost.

Electronic System
o Bureau required to apply Information Communications Technology (ICT) in its operations
o the validity and enforceability of electronic documents, permits, licenses or certificates are recognized

De minimis
o threshold FOB (Free on Board) or FCA (Free Carrier) value of Five thousand pesos (Php 5,000.00), below which no duties and taxes shall be collected.
o May be adjusted by the Secretary of Finance, in consultation with the Commissioner of Customs.

Relief Consignment
o Defined as goods donated to or leased to government institutions and accredited private entities for free distribution or temporary use of victims of calamities.
o Exempted from duties and taxes

Tools for Trade Facilitation
o Concept of Authorized Economic Operator (AEO) as drafted by the WCO is adopted and entitled to minimal requirements for processing of goods
o AEO refers to importers, exporters, customs brokers, forwarders, and other entities duly accredited by the Bureau based on international standards and national best practices.
o self-certification system in determining the applicable rules of origin.

Risk Management System
o Incentives, such as deferred payment of duties and taxes, are granted to highly compliant and low risk importers and exporters, and to importations made by the government and its instrumentalities.

Concept of Abandonment is redefined
o Impliedly abandoned goods are not deemed property of the government. Bureau may sell impliedly abandoned goods and the proceeds of the sale shall be given to the person entitled to receive them, after deduction of any duty, tax and charges due on the goods.
o Importer or owner of the goods may reclaim the abandoned goods within a period of thirty (30) days after the lapse of the period to file the declaration or to secure delivery, and upon payment of any taxes, duties or charges due on the goods.

Disposition of property in customs custody
o Option to donate the goods to another government agency, declare the same for official use of the Bureau, after approval of the Secretary of Finance, (even before public auction) or to dispose of the goods through a public sale.

Advance Ruling
o Allows an importer or exporter to file an application for advance rulings on issues involving tariff classification, valuation and rules of origin, before the goods arrive or are exported.

Streamlined appeal procedures
o Decisions made by a District Officer or Commissioner are no longer subject for reconsideration.
o Remedy of the aggrieved party is to file an appeal with the Commissioner, Secretary of Finance or the Court of Tax Appeals, as the case may be.

Inaction in cases for Automatic Review
o Decisions which are adverse to the government are subject to automatic review by the Commissioner and/or by the Secretary of Finance.
o the aggrieved party has the option to appeal the case before the Court of Tax Appeals.

Abatement of Duty and Refunds
o If less than Five thousand pesos (Php 5,000.00), no refund shall be allowed
o May be changed by the Secretary of Finance, upon consultation with the Commissioner of Customs.

Offenses and Penalties – increased penalties