Bureau of Customs: Structure and Function

• The Bureau of Customs (BOC) is the second-largest revenue-generating agency under the Department of Finance.
• It was originally established to collect duties and taxes.
• The BOC has evolved into an agency focused on economic growth and national security.
• Its commitment to trade facilitation, border control, and revenue collection reflects this focus.

Office of the Commissioner (OCOM)

• OCOM is headed by Commissioner Bienvenido Y. Rubio.

Internal Administration Group (IAG)

• IAG is under Deputy Commissioner Atty. Erwin T. Mendoza.
• This group helps formulate policies and set objectives related to financial, administrative, personnel, and planning matters for the BOC.
• It also represents the Commissioner in meetings, signs memorandum circulars, and reviews official documents.

Revenue Collection Monitoring Group (RCMG)

• RCMG is under Deputy Commissioner Atty. Clarence S. Dizon.
• RCMG maintains an accounting of collected revenues.
• It administers the legal requirements of the BOC.
• The group provides information, collection statistics, and audits.

Assessment and Operations Coordinating Group (AOCG)

• AOCG is under Deputy Commissioner Atty. Vener S. Baquiran.
• AOCG gathers and publishes values of imported commodities.
• It monitors the implementation of rules and regulations for assessment and processing of goods.
• The group handles exports, warehousing, support operations, and auction/disposal activities.

Intelligence Group (IG)

• IG is under Deputy Commissioner Juvymax R. Uy.
• IG gathers intelligence related to Customs and economic activities.
• The group conducts internal inquiries and investigations.
• It develops countermeasures against corruption, smuggling, and fraud.

Enforcement Group (EG)

• EG is under Deputy Commissioner Atty. Teddy Sandy S. Raval.
• EG exercises police authority.
• It secures the country's ports and BOC installations.
• It protects cargoes and properties within customs zones.

Management Information System and Technology Group (MISTG)

• MISTG is under Acting Deputy Commissioner Ronnel B. Hombre.
• It was created on January 9, 1998, under Executive Order No. 463 to implement BOC's computerization program.
• MISTG aims for BOC to directly manage and control IT facilities and services.
• The Deputy Commissioner oversees the different operating units within MISTG.

Post Clearance Audit Group (PCAG)

• PCAG is under Assistant Commissioner Atty. Vincent Philip C. Maronilla.
• Customs Memorandum Order (CMO) No. 32-2017 reactivated PCAG.
• PCAG was formerly known as Post Entry Audit Group (PEAG).
• PEAG was created in 2003 under EO 160-2003 to perform post-clearance audits for the Bureau of Customs.

Collection Districts

• There are 17 collection districts, each headed by a District Collector of Customs.
• They collect duties, taxes, and other charges.
• District Collectors exercise police powers.
• They supervise vessel entrance/clearance, handle foreign mail, and oversee import/export cargoes.

Subports

• There are 39 subports.
• The document lists 16 specific ports, including:
  • Port of San Fernando
  • Port of Manila
  • Manila International Container Port
  • Ninoy Aquino International Airport
  • Port of Batangas
  • Port of Legaspi
  • Port of lloilo
  • Port of Cebu
  • Port of Tacloban
  • Port of Surigao
  • Port of Cagayan de Oro
  • Port of Zamboanga
  • Port of Davao
  • Port of Subic
  • Port of Clark
  • Port of Limay

BOC's Vision

• The aim is to become a modernized and credible Customs administration, upholding good governance.

BOC's Mission

• Enhance trade facilitation
• Strengthen border control
• Improve collection of lawful revenues

Core Values

• Professionalism
• Excellence
• Integrity
• Accountability

5-Point Priority Program for 2024

• Digitalization of Customs processes
• Hit and surpass the target
• Simplify procedures and facilitate secured trade
• Curb smuggling in all forms
• Uplift employee welfare and development

Governance Culture Code

• The Bureau of Customs (BOC) launched the Governance Culture Code on July 9, 2020.
• It was launched through the Planning and Policy Research Division (PPRD)
• It sets standards for good governance and highlights the Bureau's mission, vision, core values, aspirations, and goals.
• It serves as a handbook for BOC employees.

Building Symbolism

• The POM Building represents the BOC's mandate implementation.

Carrying Vessels (Ship & Aircraft) Symbolism

• Ships and aircrafts symbolize the BOC's mandates of revenue collection, anti-smuggling, and trade facilitation.

Sea Lion Symbolism

• A sea lion carrying a torch symbolizes the BOC's powers to protect Philippine national territory (seas and skies).

Background

• Republic Act (RA) No. 10863, known as the Customs Modernization and Tariff Act (CMTA).
• It was signed into law on May 30, 2016.
• CMTA amends the Tariff and Customs Code of the Philippines (TCCP).
• The aim is to modernize Customs rules, reduce corruption, improve service, and improve supply chains.
• It serves as the primary site for public consultation on the Implementing Rules and Regulations (IRR) of the CMTA.

Customs Operations Officer II (SG-13) Responsibilities

• Perform sub-professional and professional work under supervision.
• Coordinate daily operations.
• Assist in planning, development, and enhancement of procedures.
• Prepare and submit reports.
• Conduct port operation studies, targeting of people, vehicles, facilities etc.
• Prepare periodic reports based on customs bonded warehouse transactions.
• Monitor movement/transfer of bonded raw materials for manufacturing and export.

Definition of Terms

• Importation: Bringing goods from a foreign territory into the Philippines.
• Exportation: The act, documentation, and process of bringing goods out of Philippine territory.
• Transit: Transporting goods under customs control from one customs office to another, or to a free zone, in its original form.
• Transhipment: Transferring goods under customs control from the importing transport to the exporting transport within one customs office, which handles both importation and exportation.
• Lodgement: Registration of a goods declaration with the Bureau.
• Undervaluation: Declared value fails to disclose the full price actually paid, or an incorrect valuation method is used, resulting in duty/tax discrepancy.
• Misdeclaration: False declaration regarding quantity, quality, description, weight, or measurement, leading to a deficiency in duty/tax paid or to avoid regulations.
• Misclassification: Using an insufficient or wrong description of goods or an erroneous tariff heading, resulting in duty/tax deficiency.

Prohibited Importation and Exportation Examples

• Goods advocating treason or rebellion.
• Goods intended for unlawful abortion.
• Obscene or immoral goods.
• Goods with misleading markings regarding precious metals.
• Adulterated or misbranded food/drugs.
• Infringing goods.
• Other goods prohibited by law.

Restricted Importation and Exportation (Except when Authorized by Law or Regulation) Examples

• Dynamite, gunpowder, ammunition, firearms, and weapons of war or parts.
• Gambling goods.
• Lottery and sweepstakes tickets
• Narcotics or synthetic drugs, except when imported by the government of the Philippines or any person duly authorized by the Dangerous drug board, for medicinal purposes
• Opium pipes or parts
• Other restricted goods.

Restriction on Import/Export and Transit

• Restriction includes the restriction on their transit

Goods Declaration

• It is a statement made to the Bureau and other agencies indicating the procedure for entry or admission of imported goods and the required particulars.

Assessment

• It is the process of determining the amount of duties, taxes, and other charges on imported and exported goods.

FCA (Free Carrier)

• The seller is responsible for export clearance and delivery of goods to the carrier.

FOB (Free On Board)

• Is a shipment term that defines the point in the supply chain when a buyer or seller assumes responsibility for the goods being transported.

Bill of Lading

• It is transport document issued by shipping lines, carriers, and international freight forwarders or non-vessel operating common carriers for water-borne freight.

Clearance

• Completion of customs and other government formalities necessary to allow goods to enter for consumption, warehousing, transit or transshipment, or to be exported or placed under another customs procedure.

Mission Order

• It is a written order issued by the Commissioner of Customs or authorized officer to carry out specific instructions.

Alert Order

• It is issued by authorized customs officers based on derogatory information regarding non-compliance with CMTA potentially resulting in the suspension of processing the goods declaration.

Derogatory Information Examples

• General allegations of undervaluation
• Misclassification

Warrant of Seizure or Release of Goods

• The District Collector issues a release order or seizure warrant within 5 days (2 days for perishables) upon the recommendation of alerting officer.
• If no owner is found within 15 days of the warrant, the seized goods are forfeited to the government.

Police Authority

• It is the authority granted to specific government employees to effect search, seizure, and arrest.
• It is related to the implementation of the CMTA and other laws.
• Those authorized to exercise police authority are:
  • Officials of the Bureau, District Collectors, Deputy District Collectors, Police Officers, Agents, Inspectors and Guards.
  • Upon authorization of the Commissioner, officers and members of the Armed Forces of the Philippines (AFP) and National Law Enforcement Agencies (NLEAs).
  • Officials of the Bureau of Internal Revenue (BIR) in cases involving payment of internal revenue taxes.

Search Warrant

• It is a written order issued in the name of the People of the Philippines by a judge to search for property and bring it before the Court.

Seizure

• It is taking possession of property for violations of the CMTA and related laws.

Goods Declaration for Consumption

• All shall be cleared through a formal entry process, except for the following:
  • Goods od a commercial nature with FOB or FCA value less that Fiflty Thousand Pesos
  • Personal or Household effects or goods, not in commercial quantity, imported in a passenger's baggage or mail.

Conditionally-Free and Duty Exempt Importation

• Certain goods are exempt from import duties upon compliance with regulations.
• Using the goods for unintended purposes without prior payment of duty results in forfeiture and is a fraudulent practice.
• Examples:
  • Aquatic products
  • Balikbayan boxes
  • Coffins and urns containing human remains
  • Accompanied goods
  • Properly marked diplomatic poaches/bags

Methods of Valuation

• Section 701. Transaction Value 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 tins section: Providea, That:
  • Restrictions as to the disposition or use of the goods by the buyer are not a factor:
    • If they are imposed or required by law or by Philippine authorities;
    • Limit the geographical area in which the goods may be resold; or
    • Do not substantially affect the value of the goods:
  • It is not subject to some condition or consideration for which a value cannot be determined with respect to the goods being valued; and
  • The buyer and the seller are not related
    • If they are officers or directors of one another's business;
    • If They are legally recognized partners in business;
    • If There exists an employer-employee relationship between them;
    • C.4 Any person directly or indirectly owns, controls or holds five percent (5%) or more of the outstanding voting stocks or shares of both seller and buyer;
    • If One of them directly or indirectly controls the other;
    • If Both of them are directly or indirectly controlled by a third person;
    • If Together they directly or indirectly control a third person; or
    • If They are members of the same family

• Additions to the price actually paid or payable:

  • Commissions and brokerage fees except buying commissions;
  • Cost of containers;
  • Cost of packing;
  • Value of certain goods and services such as materials incorporated in the goods, tools, engineering work done elsewhere than in the Philippines;
  • Royalties and license fees;
  • Value of any part of the proceeds of any subsequent resale that accrues to the seller;
  • Cost of transport of the imported goods from the port of exportation to the port of entry in the Philippines;
  • Loading, unloading and handling charges
  • Cost of insurance.

• Additions shall be made only on the basis of objective and quantifiable data

• Section 702. Transaction Value of Identical Goods-Method Two.

  • When 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

• Section 703. Transaction Value of Similar Goods-Method 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

• Section 704. Deductive Value-Method Four.

  • 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 700 hereof.
    • deductions are:
      • commissions usually paid or agreed to be paid or 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
      • the usual costs of transport and insurance and associated costs incurred within the Philippines
      • the costs 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 (iii) insurance
      • the customs duties and other national taxes payable in the Philippines by reason of the importation or sale of the goods

• Section 705. Computed Value-Method Five.

  • Where the dutiable value cannot be determined under the preceding method, the dutiable value shall be the computed value of the sum of:
    • The cost or the value of materials and fabrication or other processing employed in producing the imported goods;
    • The 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;
    • The freight, insurance fees and other transportation expenses for the importation of the goods;
    • Any assist, if its value is not included under paragraph (1) hereof; and
    • The cost of containers and packing, if their values are not included under paragraph (1) hereof.

• Section 706. Fallback Value-Method 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.
    • No dutiable value shall be determined under method six on the basis of:
      • The selling price in the Philippines of goods produced in the Philippines
      • A system that provides for the acceptance for customs purposes of the higher of two alternative values
      • The price of goods in the domestic market of the country of exportation