Effective Communication in Organizations

Customs Memorandum Order (CMO) No. 03-2022

• Subject: Revised Rules and Regulations on the Establishment, Supervision, Operation, and Control of Customs Bonded Warehouses (CBWs)

Section 1. Objectives

• To establish procedures for the establishment and operation of Customs Bonded Warehouses (CBWs).
• To create a management system for CBWs using ICT for monitoring, supervision, and control.
• To implement a compliance regime for CBW operators regarding operations, and to provide sanctions for violations.
• To establish the duties, responsibilities, and accountabilities of BOC personnel assigned to CBWs and CBW operators.

Section 2. Administrative Provisions

2.1. General Considerations

2.1.1. Transfer of Goods to CBWs

• Goods transferring to CBWs are subject to a mandatory non-intrusive inspection at the port of discharge (whether covered by WSAD or TSAD).
• District Collectors will allow immediate transfer to CBW warehouses, if the goods are not selected for physical/non-intrusive inspection.

2.1.2. Storage Period of Bonded Goods

• Goods allowed to remain in a CBW for a maximum of one year from arrival.
• Goods in Customs Common Bonded Warehouses (CCBWs) have a storage period starting from arrival at the mother warehouse.
• Perishable goods have a storage period of three months.

2.1.3. Allowable Importations

• Importations are limited by the CBW's authority/license.
• Specific raw materials, volumes, and quantities are allowed based on corresponding HS Tariff lines.
• Industry-Specific Customs Bonded Warehouses (ICBWs) have transfer/sales limits for Client End-Users.

2.1.4. Non-importation of Finished Goods

• Finished goods importation is forbidden except for use as components in the manufacture/production of other finished goods for export, approved by the Customs Bonded Warehouse Committee (CBWC).

2.1.5. Restricted and Regulated Goods

• Restricted and regulated goods require the proper clearance and import authority from a competent authority.
• Goods without the required clearance are subject to seizure and forfeiture.

2.1.6. Withdrawals for Local Sales/Domestic Consumption

• Local sales/domestic consumption withdrawals are allowed only with District Collector approval and payment of duties and taxes.
• Withdrawals cannot exceed 30% of the total volume of bonded raw materials transferred to the CBW for the year, (not applicable for Private Customs Bonded Warehouses (PCBWs)).

2.1.7. Withdrawal for Sub-Contracting

• CBW operators can subcontract processing activities if they lack the necessary facilities, or if they need additional time to meet export commitments (with District Collector approval).
• Garment sub-contract transfers are subject to government agency rules and regulations, and only pre-cut or cut-to-pattern materials can be transferred.

2.1.8. Prohibition on Importations by Industry-Specific Customs Bonded Warehouses

• ICBWs cannot import fibers, yarns, fabrics, and accessories for garment manufacturing.

2.2. Provisions Specific to Common Customs Bonded Warehouses (CCBWs) and Its Accredited Members

2.2.1. One Mother Warehouse

• Each manufacturer-exporter can only be accredited to one Customs Common Bonded Warehouse (CCBW), known as the mother warehouse.
• Accredited members maintain their books and records of materials on location, and the warehouse must be accessible to authorized government officials.

2.2.2. Maintenance of Records

• CCBW members keep records of imported materials for inspection by authorized officials.

2.2.3. Accessibility of Warehouse

• The warehouse and its affiliated spaces must be accessible to authorized customs officials.

2.2.4. Transfer to CCBW warehouses

• All goods transferring to CCBWs must first pass through the CCBW Operator for record-keeping.

2.2.5. Liquidation of Raw Materials

• The CCBW Operator has the responsibility of liquidating imported raw materials of accredited members.

2.2.6. Accreditation and Pre-Termination

• Members without import/export activity for a year have their accreditations deemed pre-terminated (without impacting new applications).
• Members cannot use transfers to extend the initial storage period (set from the mother warehouse's receipt of imported goods).

2.2.7. Member Transfer

• Transfers of membership from one CCBW to another is not allowed to circumvent the one-year rule or to extend the initial storage period.

2.2.8. Transfer/Sales between Members

• Transfer/sales of bonded goods between members of the same CCBW does not extend the storage period of imported goods from the mother warehouse.
• Only semi-finished/finished goods that have undergone processing/manufacturing by a member can be transferred to another member of the same CCBW (without payment of duties and taxes).
• For further processing/use in additional semi-finished/finished goods, transferee/buyer must additionally process the imported goods.

2.2.9. Replacement of Import Entries (WSAD)

• For replacement of former import entries, new CCBWs must file a WSAD with the responsible authorities.

2.2.10. Transfer/Sale to Other Members

• Further transfers/sales of goods within the same CCBW is not allowed.

2.2.11. Transfer/Sale of Goods

• The transfer/sale of bonded goods is subject to District Collector approval.

2.2.12. Joint and Several Liability

• Both the CCBW and its member-buyer are jointly and severally liable for issues related to the transfer/sale of bonded goods.