Customs Bonded Warehouses Quiz

Customs Memorandum Order (CMO) 03-2022

• Revised rules and regulations on the establishment, supervision, operation, and control of Customs Bonded Warehouses (CBWs)
• Aims to provide procedures for CBW establishment and operation, improve transparency, and institute a full compliance regime
• Includes provisions for transfer of goods, storage periods (differentiating between perishable & non-perishable), allowable importations, restricted/regulated goods, withdrawals for local sales, and for sub-contracting.

Objectives

• Establish CBW procedures and operations
• Implement a CBW management system using ICT for better monitoring and control
• Establish a full compliance regime for CBW operators and provide sanctions for violations
• Define duties, responsibilities, and accountabilities of BOC personnel and CBW operators

Administrative Provisions

• Transfers of Goods to CBWs: Goods transfer to CBWs requires mandatory non-intrusive inspection at the port of discharge (whether WSAD or TSAD). If the goods are not placed under an Alert Order or chosen for physical/non-intrusive examination, an immediate transfer is possible.
• Storage Period of Bonded Goods: Goods can remain in a CBW for up to one year from arrival (extendible for valid reasons). Perishable goods have a three-month maximum. Common Bonded Warehouses (CCBWs) calculate storage from the arrival of goods at the mother warehouse.
• Allowable Importations: Importations are limited based on the CBW's authority/license, specific raw materials, quantity, and the type of CBW
• Non-importation of Finished Goods for warehousing unless part of another manufactured/exported finished good.
• Restricted and Regulated Goods: Entry or storage of these goods requires the appropriate clearance and authorization
• Withdrawals for Local Sales/Domestic Consumption: Withdrawals for such consumption are permitted with District Collector approval and payment of taxes, limited to 30% of total bonded materials brought in for the year.

Procedures for Application for the Issuance of Authority to Operate a CBW

• Application is filed with the Collection District responsible for the location
• Includes details about the premises, location, capacity, and purpose of the proposed facility.
• Necessary Documents:
  • BOC Accreditation as an importer
  • Lease contract/title to the property.
  • Maps, layouts, structural diagrams
  • Inventory, office spaces, and any relevant details.
  • Feasibility study.
  • Monthly raw material importation requests
  • Compliance with all requirements

Procedures for Renewal of Authority to Operate a CBW

• Renewal applications are due 120 days before the expiration of the authority and must be filed properly with the relevant Collection District.
• Additional documents required for renewal:
  • Current Importer's Accreditation
  • Income Tax Returns or Audit Financial Statement
  • Performance Clearance documents

Procedures for Application for Membership to a CCBW

• Conform to Section 3.1 procedures for CBW approval, and include documents relating to membership intent, debt-free status with former CCBW, and written approval from the former CCBW

Procedures for Application for Accreditation as Sub-Contractor

• Firm must meet criteria outlined in CMO and submit supporting documents including a Service Agreement or Memorandum of Understanding

Application for Accreditation as Client End-User of an ICBW

• Companies can apply if they meet the requirements for CBW operation
• Applications must include details of any contracts, material requirements, and the products they plan to produce.

Application for Accreditation as Client-Exporter of a Manufacturing CBW or Accredited Member of a CCBW

• Operators apply for company accreditation to support their client exporters
• Additional requirements for applications may include export accreditations and related documents

Application for Renewal of Authority to Operate a CBW

• Applications must be completed 91 days prior to expiration
• Includes details about ongoing obligations, financial statements, and updated details about the firm's operations.

Withdrawal of Bonded Goods

• Goods can be withdrawn under several circumstances, including for production, export, or sale to other CBWs.
• The necessary forms and supporting documents are detailed in the notes.

Disposition of Wastages, Rejects and By-Products

• Wastages, rejects, and by-products can be addressed through consumption, re-exportation, or condemnation, following specific procedures.

Liquidation of Materials, Entries, and Cancellation of Bonds

• Clearances must be made within 60 days of last export.
• Includes a list of required documents for liquidation and cancellation.

Abandonment of Bonded Goods

• Goods that are not processed or exported within the permitted time are considered abandoned.
• The operator has the option of paying taxes, exporting the goods, or abandoning them formally.

Suspension and Closure of CBW

• The CBW can be closed for various reasons, including fraud, inactivity, violations, or structural/usage issues.
• The process includes a closure order and required procedures for closing and transferring any remaining goods.

Inspection of CBW and Inventory of Bonded Goods

• Regular inspections and inventories of CBWs are required for compliance verification and to ensure there are no violations.
• Includes lists of documents required and the process for the checks.

Duties of Customs Personnel

• Detailed descriptions of duties for the different roles within the Customs service related to CBWs.

Test your knowledge on Customs Bonded Warehouses (CBWs) and their regulations. This quiz covers topics such as storage periods, conditions for withdrawal, and application processes for operation. Ideal for individuals interested in customs and warehousing laws.