CUSTOMS MODERNIZATION

and
TARIFF ACT
Significance to Maritime Commerce

ATTY. FERDINAND A. NAGUE, C.B., MINCU

MARLAW-PORTCALLS CONFERENCE
Bayleaf Intramuros, Manila
24 February 2017
 Presentation Outline
Milestones of the CMTA
Salient Features on
Maritime Commerce
Implementing Rules and
Regulations
Q&A

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 Milestones of the CMTA
May 30, 2016 - Signed into Law.
June 01, 2016 - Published in Manila
Bulletin.
June 16, 2016 Effectivity date of the
CMTA. (R.A. No. 10863)
Crafting of IRR Ongoing.
Only 4 Regulations are issued since
effectivity.
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Customs Jurisdiction
Over all seas within Philippine territory;
All coasts, ports, airports, harbors, bays,
rivers and inland waters whether
navigable or not from the sea; and
Any means of conveyance. (Sec. 300, CMTA).

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Doctrine of Hot Pursuit
BOC to pursue imported goods subject to seizure during
its transport by land, water and air and shall exercise
jurisdiction as may be necessary for the effective
enforcement of the CMTA.
When a vessel becomes subject to seizure for violation
of the CMTA, a pursuit of such vessel or began within
the territorial waters, may continue beyond the same,
and the vessel or aircraft may be seized in the high
seas. (Sec. 300, 2nd par.)

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Customs Control
All goods;
Including means of transport, entering
or leaving the customs territory;
Regardless of whether they are liable
to duties and taxes;
Shall be subject to customs control to
ensure compliance of the CMTA. (Sec.
301, CMTA)
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Exclusive Customs Control
Exclusive control, direction and
management of customs offices, facilities,
warehouses, ports, airports, wharves,
structure, etc.
In all cases without prejudice to the general
police powers of the LGUs, the Philippine
Coast Guard and of law enforcement
agencies in the exercise of their respective
functions. (Sec. 303, CMTA)

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Customs Surveillance
Conduct surveillance on vessels (and goods)
entering PH territory.
Provided, That the function of the Philippine Coast
Guard to prevent and suppress the illegal entry of
goods, smuggling and other forms of customs fraud
and violations of maritime law and its proper
surveillance of vessels entering and/or leaving
Philippine territory as provided in RA 9993, (PH Coast
Guard Law of 2009), shall continue to be in force.
(Sec. 306, CMTA)

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Forwarding of Remains of
IN CASE OF VESSELS WRECKED IN THE PHILIPPINES
Wrecked
The owner of Vessel
the wrecked vessels may be
permitted to export the remains of the
wreck vessel upon proper examination and
inspection.
The remains of a wrecked vessel shall include
not only its hull and rigging, but also all sea
stores, goods and equipment, such as sails,
ropes and chain anchors. (Sec. 417, CMTA)

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Forwarding of Remains of
IN CASE OF VESSELS WRECKED IN THE PHILIPPINES
Wrecked Vessel
Derelicts & goods salvaged from wrecked
foreign vessels are dutiable and may be
entered for consumption or warehousing.
Foreign goods from a vessel in distress is
dutiable if sold or disposed of in the PH.
No part of a Philippine vessel or aircraft or
its equipment, wrecked either in Philippine
or foreign waters, shall be subject to duty.
(Sec. 418, CMTA)
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No B/L no Release of Imported
No customs officer shall release
Goods
goods to any person without the
submission of the bill of lading.
Except on written order of the carrier
or agent of the vessel, in which case
neither the government nor the
customs officer shall be held liable for
any damage arising from wrongful
release of the goods. (Sec. 433,
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Satisfaction of Lien by Court
Order
When the District Collector is duly notified
through a lawful order of a competent
court of a lien for freight, lighterage or general
average upon any imported goods, the District
Collector shall withhold the release of the goods
unless the claim has been paid or secured.
In case of disagreement, the District Collector
may release the goods after payment of the
freight and lighterage due on the quantity or
weight landed as actually determined. (Sec.
435, CMTA)
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Privileges to Import Duty/Tax
Free
Equipment for use in the salvage
of vessels, not available locally:
Requirements:
100% Security/Re-export Bond of the
Import Taxes;
Re-exportation within six (6) months
from the date of acceptance of the goods
declaration.
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Privileges to Import Duty/Tax
Cost of repairs, excluding the value of the
Free
goods used in foreign countries upon
vessels licensed in the PH.
Requirements:
No adequate facilities in the PH for such repairs;
Vessels while in the regular course of their
foreign voyage, were compelled by stress of
weather or other casualty;
To secure the safety, seaworthiness of the
vessels.

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Privileges to Import Duty/Tax
Free
Goods and salvage from vessels
recovered after a period of two (2) years
from the date of filing the marine protest
or the time when the vessel was wrecked
or abandoned; or
Parts of a foreign vessel or its equipment,
wrecked or abandoned in PH waters or
elsewhere.

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Privileges to Import Duty/Tax
Free
Replacements (Spare) parts of vessels
of foreign registry.
Requirements:
Engaged in foreign trade
Spare parts shall be used to secure the
safety or seaworthiness of the vessel, to
enable it to continue its voyage.

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Powers & Functions of the Customs
Commissioner
Exclusive & original jurisdiction to interpret the provisions of the
CMTA;
Assignment /reassignment of any customs officer subject to the
approval of SOF up to the level of DC;
Distraint of personal property; levy on Real Property; Garnishment
of bank accounts;
Power to obtain information and issue summons for the production
of documents & take testimonies; and
Obtain information from banks on commercial documents pertaining
to payments relevant to import transactions. (Secs. 201, 1132-34,
1004, CMTA)

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Form of Goods Declaration
Shipments with a declared value of PHP50k or
above -FORMAL ENTRY process.
Except in the following instances where goods
shall be cleared through INFORMAL ENTRY:
(1) FOB/FCA value of less than Php50k; or
(2) Personal or Household Effects or Goods
not in commercial quantity, imported in a
passengers baggage and mail.
(Sec.402,CMTA)

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New Lodgement Procedures
& Abandonment
Imported goods shall be deemed abandoned
in case of failure to comply with the separate
mandatory periods:
Period to Lodge goods declaration: Within
15 days from the notice of discharge of the
last package from the vessel or aircraft.
Extendible for another 15 days (upon
request and based on valid grounds).
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 Period to pay duties and taxes: within 15
days from receipt of notice of final
assessment; and

Period to claim goods: within 30 days from

payment of duties and taxes.

Express Abandonment In writing and filed

with the Collector of Customs.

(Secs. 1129/407, CMTA)

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 Technicalities in the
Declaration
Misdeclaration, Misclassification or Undervaluation
of goods (where the discrepancy between the should
be duty and VAT payable v. the duty and VAT actually
paid is more than 10%), there shall be imposed a
surcharge of 250% of the duty and tax due.

An increase from the old law to a maximum of 200% of

the duty difference under the TCCP and customs
issuances. (Sec. 1400, CMTA)

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 Final Assessment
Notice
Assessment shall be deemed final fifteen (15)
days after receipt of the notice of assessment
by the importer or consignee. (Sec. 429).

Payment under Protest is the remedy at the

time of payment or within 15 days thereafter.

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Who is a Declarant?

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A declarant may be a consignee or a
person who has the right to dispose of the
goods. The declarant shall lodge a goods
declaration with the Bureau and may be:

(a) The importer, being the holder of the

bill of lading; or

(b) The exporter, being the owner of the

goods to be shipped out; or
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(c) A customs broker acting under the
authority of the importer or from a holder of
the bill.

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(d) A person duly empowered to act as agent
or attorney-in-fact for each holder.

-Suspended until after 2 years!

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 In case the consignee or the person
who has the right to dispose of the
goods is a juridical person, it may
authorize a responsible officer of the
company to sign the goods declaration
as declarant on its behalf. (Sec.
106,CMTA).

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 Responsible Persons
under the Rule 14, Sec.
11, Rules
President of Court
Managing Partner
General Manager
Corporate Secretary
Treasurer
In-house Counsel
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Processing at
Customs
The goods declarations submitted
to the Bureau shall be processed by
the:

declarant or by a licensed customs

broker

Atty-in-Fact (suspended until 2 years

from June 16, 2016)
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Responsibilities
of the
Declarant

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.
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 The licensed 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.

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 The declarant shall sign the
goods declaration, even when
assisted by a licensed customs
broker, who shall likewise sign the
goods declaration. (Sec.107, CMTA)

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When Duty and Tax are Due
on Imported Goods
All goods, when imported into the
Philippines, shall be subject to duty upon
importation, including goods previously
exported from the Philippines.
Unpaid duties, taxes and other charges, shall
incur legal interest of twenty percent (20%) per
annum computed from the date of final
assessment under Section 429 of the CMTA,
when payment becomes due and demandable.
The legal interest shall likewiseCMTAaccrue onNague
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Liability of Importer
for
Duties andby Taxes
Unless relieved laws or
regulations, the liability for duties, taxes,
fees, and other charges attached to
importation constitutes a personal debt
due and demandable against the
importer in favor of the government and
shall be discharged only upon payment of
duties, taxes, fees, and other charges. It also
constitutes a lien on the imported goods
which may be enforced while such CMTA Bookgoods are39
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Unlawful Importation &
Exportation
Any person who shall fraudulently import or
export or bring into or outside of the Philippines
any goods, or assist in so doing, contrary to law,
or shall receive, conceal, buy, sell, or in any
manner facilitate the transportation, concealment,
or sale of such goods after importation, or shall
commit technical smuggling as defined in this
Act shall be penalized by:

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 Penalties of
imprisonment
Imprisonment of a minimum of 30 days
or
to fine
a maximum of 12 years or a fine of a
minimum amount of P25k to as high as
P50M or both.

Unlawful importation becomes a

Heinous Crime appraised value of the
goods including DT exceeds P200M
punishable by reclusion perpetua and a
fine of not less than P50M.
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Other Fraudulent
Practices against
Customs Revenue
Any person who makes or attempts to
make any entry of imported or
exported goods by means of any false
or fraudulent statement, document or
practice or knowingly and willfully
files any false or fraudulent claim for
payment of drawback or refund of
duties shall, for each act, be punished
in accordance with the penalties
prescribed in Sec. 1401 of the CMTA.
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THANK YOU

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