2024 Customs Documentations, Clearance & Procedures PDF

GEN Z 2024 CUSTOMS DOCUMENTATIONS, CLEARANCE AND PROCEDURES PRIME ANGELO M. MAÑALAC, LPT, LCB, MBA, JD...

GEN Z 2024 CUSTOMS DOCUMENTATIONS, CLEARANCE AND PROCEDURES PRIME ANGELO M. MAÑALAC, LPT, LCB, MBA, JD Review Lecturer/ Professor 1 WARNING AND NOTICE TO REVIEWEES WARNING AND NOTICE TO REVIEWEES (For Lecturer’s Lecture and Review Materials) (For Lecturer’s Lecture and Review Materials) Service provides, website hosts, social media’s group The unauthorized copying, dissemination, sharing, administrators and members, bloggers, etc., who disseminate, GEN Z uploading, downloading, and storage of Gen Z Prime’s lectures and other review materials is strictly prohibited and will be prosecuted to the full extent of GEN Z share, or provide public or unauthorized access to Gen Z Prime’s lectures and other review materials shall likewise be criminally prosecuted and charged. Among other laws, these unauthorized acts are punishable as online piracy under Republic Act No. 8792, PRIME the law, including the filing of criminal charges to the court having jurisdiction of the case as well as administrative complaints with the Professional PRIME otherwise known as Electronic Commerce Act, which provides for a minimum fine of P100,000.00 and a maximum commensurate to the damage incurred and mandatory IMPRISONMENT (NO Regulatory Board for Customs Brokers. PROBATION) of six (6) months to three (3) years. 3 4 2024 CUSTOMS DOCUMENTATIONS, CLEARANCE AND PROCEDURES REVIEW TOPICS DAYS TOPICS 1 THE ESTABLISHMENT OF THE BUREAU OF CUSTOMS CUSTOMER CARE CENTERS (CCCs) AND THE ZERO-CONTACT POLICY IMPLEMENTING REPUBLIC ACT 11032 OR THE EASE OF DOING BUSINESS AND EFFICIENT GOVERNMENT SERVICE DELIVERY ACT OF 2018 POST CLEARANCE AUDIT 2 3 4 GEN Z IMPORT CLEARANCE THROUGH FORMAL ENTRY PROCESS AND MODES OF PAYMENT CONDITIONALLY TAX AND/OR DUTY EXEMPT IMPORTATION RELIEF CONSIGNMENT, BAGGAGE CLEARANCE, POSTAL ITEM, EXPORTS GEN Z AND PRIOR DISCLOSURE 5 TRANSIT AND TRANSSHIPMENT; STORES AND SERVICE PROVIDERS/THIRD PARTIES PROGRAM (CAO 1-2019) 6 7 8 PRIME POST CLEARANCE AUDIT CBW ESTABLISHMENT, CFW AND FREE ZONE OPERATIONS SPECIAL PROCEDURES PRIME 9 DRAWBACK, ABATEMENT, REFUNDS AND CMTA MISCELLANEOUS PROVISIONS 10 MOCKBOARDS 5 6 POST CLEARANCE AUDIT GROUP (PCAG) POST CLEARANCE AUDIT GROUP (PCAG) The Department of Finance (DOF) Secretary has The Post Clearance Audit group (PCAG) is approved Customs Administrative Order (CAO) mandated to conduct audit of importers, beneficial GEN Z No. 01-2019, signed on 9 January 2019, implementing the post clearance audit functions of the Bureau of Customs (BOC), prior GEN Z or true owners of imported goods, customs brokers, agents, and locators, as well as all other parties engaged in the customs clearance and processing disclosure program and other relevant PRIME provisions of the Republic Act (RA) No. 10863 or the Customs Modernization and Tariff Act PRIME functions. Audits will be conducted by two operating units, namely the Trade Information and Risk Analysis Office (PCAG-TIRAO) and (CMTA). Compliance Assessment Office (PCAG-CAO). 7 8 POST CLEARANCE AUDIT GROUP (PCAG) POST CLEARANCE AUDIT GROUP (PCAG) The key features of CAO No. 01-2019 on Post Clearance Audit (PCA) are outlined below. The selection criteria for any company to undergo PCA include: GEN Z -relative magnitude of customs revenue to be generated from the company; GEN Z -rates of duties of the company’s imports; PRIME -compliance track records of the company; -assessment of the risk to revenue of the company’s import activities; -compliance level of a trade sector; and PRIME -non-renewal of an importer’s customs accreditation. 9 10 POST CLEARANCE AUDIT GROUP (PCAG) PCAG’s mandates PCAG (formerly PEAG) activated under EO 46 s. 2017. The PCAG is mandated to conduct, within three (3) years Headed by Assistant Commissioner appointed by the from the date of final payment of duties and taxes or customs clearance, an audit examination, inspection, GEN Z Philippines upon recommendation of the Commissioner through Secretary of Finance. Two (2) operating units under PCAG headed by Director II – GEN Z verification, and investigation of records pertaining to any goods declaration, which shall include statements, declarations, documents and electronically generated or PRIME PRIME Trade Information and Risk Analysis Office (TIRAO) machine readable data, for the purpose of ascertaining the -Trade Information Analysis Division I and II correctness of the goods declaration and determining the Compliance Assessment Office (CAO) liability of the importer for duties, taxes and other -Audit Divisions I-V charges, including any fine or penalty. 11 12  The PCAG-TIRAO shall perform The PCAG-CAO shall perform the following functions: the following functions: a. Review available trade data to determine compliance markers of industry (or other means of data groupings) and set benchmarks for the purpose of a. Prepare the audit work plan, scope and approach for the developing an audit program for the Commissioner's approval; approved priority audit candidates; GEN Z GEN Z b. In coordination with the Management Information System and Technology Group (MISTG), develop a computer-aided risk- based management system, b. Conduct the audit examination, inspection, verification or investigation the parameters of which are to be based on objective and quantifiable data, of records subject to applicable laws, approved policies, guidelines, subject to the approval of the Secretary of Finance upon recommendation of manuals and standard operating procedures; the Commissioner, for use in the profiling and identification of potential c. Prepare and submit the required reports on audit findings and PRIME PRIME priority audit candidates based on the approved audit program; recommendations to the Commissioner of Customs for approval; c. Recommend for approval of the Commissioner of Customs the potential priority audit candidates; d. Establish and maintain a customs compliance program; and e d. Develop policies, guidelines, manuals and standard operating procedures e. Perform such other functions as may be necessary or incidental in relating to the audit process; and carrying into effect the provisions of this Order, and as may be provided by law. e. Perform such other functions as may be necessary or incidental in carrying into effect the provisions of this Order, and as may be provided by law.13 14 SCOPE OF AUDIT SCOPE OF AUDIT 1. The Bureau shall develop a computer-aided risk- based management 2. Customs Brokers and Importer's duly authorized agents may be system, the parameters of which are to be based on objective and audited to validate information provided by their Importer clients quantifiable data to be approved by the Secretary of Finance upon and fill information gaps revealed during the audit." recommendation of the Commissioner of Customs. GEN Z GEN Z Post clearance audit of Importers shall be undertaken when firms are 3. The Commissioner may authorize the conduct of compliance audit selected based on any but not limited to the following criteria: of importers, locators, specific group of importers or other parties engaged in the customs clearance process as he may deem a. Relative magnitude of customs revenue to be generated from the firm; necessary. b. The rates of duties of the firm's imports; c. d. e. PRIME The compliance track records of the firm; An assessment of the risk to revenue of the firm's import activities; The compliance level of a trade sector; and PRIME For this purpose, the Management Information System and Technology Group (MISTG) in coordination with the PCAG TIRAO shall develop the computer-aided risk-based management system to facilitate the risk assessment and conduct of audit. The f. Non-renewal of an Importer's customs accreditation. PCAG shall gather data or information from other offices and organizations to set the risk parameters for audit. 15 16  AUDIT AND EXAMINATION OF RECORDS Within 3 years from the date of final payment of duties and taxes; or customs clearance, as the case may PERIOD THAT PCA MAY BE be, GEN Z CONDUCTED AND PERIOD GEN Z – the Bureau may conduct an audit examination, inspection, verification, and investigation of records pertaining to any goods declaration, which shall include statements, OF LIMITATION PRIME PRIME declarations, documents, and electronically generated or machine readable data, for the purpose of ascertaining the correctness of the goods declaration and determining the liability of the importer for duties and taxes including any fine or penalty. 17 18 ENTITIES REQUIRED TO KEEP PERIOD OF LIMITATION RECORDS In the absence of fraud and when the goods have 1. Importers – All importers are required to been finally assessed and released, the GEN Z assessment shall be conclusive upon all parties 3 years from the date of final payment of duties GEN Z maintain and keep all records of their importations, book of accounts, business and computer systems and all customs and taxes, or upon completion of the post PRIME clearance audit. PRIME commercial data including payment records. 19 20 ENTITIES REQUIRED TO KEEP RECORDS ENTITIES REQUIRED TO KEEP RECORDS 2. A person ordering imported goods from a local importer or supplier in a domestic transaction if: 1. Importer shall refer to the following: a. the person placing the order controls the material terms and conditions of the 1. Importer-of-record or consignee, owner or declarant, or a importation; party who: b. the person placing the order and the importer or supplier are related in such a GEN Z a. Imports goods into the Philippines or withdraws admitted goods from the Free Zones into the customs territory for consumption or warehousing; files a claim GEN Z way that the former may be considered as the beneficial or true owner of the imported goods, as may be exemplified by the following circumstances: I. the person placing the order is the sole buyer of the goods imported by the importer-of-record; II. the importer-of-record is an affiliate of the judicial entity which placed the PRIME PRIME for refund or drawback; or transports or stores such goods order; or carried under or held under security; or III. the importer-of-record and the entity which placed the order are owned by b. knowingly causes the importation or transportation or the same set of majority stockholders, whether nominal or beneficial, in both corporations storage of imported goods referred to above, or the filing c. the person or entity placing the order furnished the importer or exporter with of refund or drawback claim. technical data, molds, equipment, other production assistance, material, components or parts with knowledge that these will be used in the manufacture 21 or production of imported goods or the goods to be imported. 22 ENTITIES REQUIRED TO KEEP RECORDS ENTITIES REQUIRED TO KEEP RECORDS 2. Customs Brokers and Other Parties – All Customs Brokers and other parties engaged in Customs Clearance and 3.A person whose activities require the filing of a processing are required to keep manual and/or electronic copies of the records covering transactions that they handle. Should GEN Z goods declaration; or GEN Z electronic copies of records be maintained, the recordkeeping must be compliant with the applicable laws, rules and regulations on electronic data. 4. agent of the importer of the importer-of record PRIME or consignee, owner or declarant PRIME 3. Locators – Locators are required to keep records of all transactions and activities relating to the admission and withdrawal of goods from the free zones into the customs territory. 23 24 PURPOSES OF KEEPING RECORDS PERIOD AND PLACE TO KEEP RECORDS 1. To confirm the truthfulness and accuracy of the goods declaration and the TV of the imported goods; Importers are required to keep all records pertaining to the 2. To check the adequacy and integrity of the manual or electronic system ordinary course of business and to any activity or information or systems by which the required records are filed, maintained and contained in the records required at their principal place of 3. GEN Z stored, whether specific transaction-based or account-based; To determine the level of compliance of importers, customs brokers, locators and other parties required to keep records herein with laws GEN Z business for period of 3 years from the date of final payment of duties and taxes or customs clearance whichever is later, as the case may be. and regulations which are enforced by BOC whether or not such 4. PRIME regulations were issued by BOC; and To serve as basis for the imposition of sanctions for non-compliance on records keeping and non- compliance of regulatory obligations of the PRIME All parties engaged in customs clearance and processing as well as locators or person authorized to bring imported goods into Free Zones are required to keep records related to such importers and other entities required to keep records, subject to customs clearance and processing at their principal place of applicable laws, rules and regulations. business for a period of 3 years from the date of filing of the goods declaration. 25 26 RECORDS REQUIRED TO BE KEPT CONDUCT OF POST CLEARANCE AUDIT The PCAG shall prepare a set of post clearance audit procedures, for approval by the Commissioner, to strictly govern the audit to achieve the highest level of objectivity, fairness, efficiency, and transparency. The guidelines shall include the The following records, or their equivalent following procedural/operational concerns: a. Profiling/Information Analysis - PCAG - TIRAO shall perform risk profiling analysis activities on the Importers. This includes data gathering and evaluation of import and export operations. document, are required to be kept for the b. Audit Notification The Commissioner shall issue an Audit Notification Letter (ANL) to the company identified for GEN Z GEN Z audit. The ANL shall contain the name or names of the authorized customs personnel from PCAG - CAO to perform post clearance audit. It shall be valid for thirty (30) calendar days from the date of issuance, subject to revalidation purpose of post clearance audit. by the Assistant Commissioner for another thirty (30) days prior to its expiry, and must be served to the Importer through any of the following modes of service: (1) by personal service at the principal place of business; (2) by registered mail; or (3) through electronic notice sent to the registered official electronic mail address during its validity. Failure to serve ANL within the period without proper justification shall make the Customs personnel in charge administratively liable. PRIME PRIME c. Audit Plan - The audit team shall prepare an audit plan to fit the circumstances of the audited company and meet Kindly refer to CAO 1-2019 for the list. d. the specific audit objectives in the most expeditious and transparent manner. Conduct of Audit Proper The audit team shall commence the audit proper not later than sixty (60) calendar days from the service of the ANL. In case the Importer manifests his intention to avail of the PDP, the conduct of the audit proper shall be deferred subject to the provisions of Section 6.1.2 of this Order. The audit proper shall take place when the audit team actually conducts examination, inspection, verification and investigation of accounting and financial records and goods declaration and other records being kept and maintained by the Importer. The audit team may require the presentation of the original of the certified true copies of documents submitted for verification of its authenticity. A copy of any document certified by or on behalf of the Importer is admissible in evidence in all courts as if it were the original copy. 27 28 COMPLETION OF POST CLEARANCE COMPLETION OF AUDIT AND DEMAND AUDIT LETTER If the audit team would be unable to submit the FAR within the The audit shall be completed within 120 days per year of required period, a status report must be submitted to the audited period from the date of importer receives the ANL. For Commissioner through ASCOM no later than 5 calendar days prior this purpose, the audit is considered completed when the Final to expiration of the said period giving the reasons for the GEN Z Audit Report (FAR) with Demand Letter, or PCAG-Clean Report of Findings (PCAG-CRF) has been submitted by the audit team, endorsed by the ASCOM and subsequently GEN Z non-completion of the audit and the proposed period to complete the audit not exceeding 30 days. e. Service of Demand Letter for Payment of Deficiency. Within 5 approved by the Commissioner. days from receipt of the Demand Letter signed by the PRIME The issuance of the PCAG-CRF shall be deemed as proof that PRIME Commissioner, the PCAG shall send the same to the importer through any of the following modes of service: (1) personal service at the principal place of business; (2). by registered mail; or (3) the importer or entity subject of audit has been found to have through electronic notice sent to the registered official electronic no deficiency in duties, taxes and that the importer is compliant mail address with a demand to pay not later than 15 calendar days with its obligation to keep records as required by law. 29 from receipt 30 CONDUCT OF POST CLEARANCE AUDIT CONDUCT OF POST CLEARANCE AUDIT f. Reconsideration or Reinvestigation on Audit Findings. The h. Reporting to DOF and BIR. BOC shall furnish the DOF and importer adversely affected by the deficiency assessment issued by BIR a copy of the final audit results within 30 days from the the PCAG and approved by the Commissioner may file a request for issuance thereof including the amount paid by the importer. In reconsideration or reinvestigation to the Commissioner within 15 addition, BOC shall provide a quarterly status report to the GEN Z days from receipt of the Demand Letter. For requests for reinvestigation, the importer shall submit all relevant supporting documents in support thereof within 30 days from the date of filing, GEN Z DOF of all ANLs issued and audits conducted. Nothing in the section shall be construed as restricting or otherwise, the request shall be denied. BOC, through the PCAG, calling into question the right of BOC, through the PCAG, to resolve the request. PRIME shall have 60 days from submission of complete documents to g. Acknowledgment Letter. Payment of the amount demanded, BOC PRIME satisfy itself as to the truth or accuracy of any statement, document or declaration presented for customs valuation purposes, and as may be necessary for the purpose of collecting shall immediately issue without a need for request from the the proper duties and taxes and to determine compliance with importer, a letter acknowledging receipt of the payment made by the the government rules and regulations importer and with a statement that the audit is completed. 31 32 ACCESS TO RECORDS ACCESS TO RECORDS 1. The importer shall give to BOC personnel authorized to Customs Brokers and the importer’s duly authorized agents acting conduct the audit full and free access to the premises where in behalf of the importer at any stage of the Customs Clearance the records are kept, or provide full and free access to a process are likewise required to give authorized BOC personnel cloud based data-room, or a private server, or other devices, showing the importer’s: a. Document Flow; GEN Z to conduct the audit. This may include access to records GEN Z under PCAG full and free access to records covering transactions for purposes of validation and to fill information gaps revealed during the audit of their importer clients. In addition, the authorized customs officer may require the importer b. c. d. Financial Flow; Goods inventory; and PRIME Other business processes necessary or relevant in determining: PRIME and Customs Broker to submit certified copies of any such documents or extracts thereof. The Customs officer shall present written evidence of his authority. The person in charge of the i. The adequacy and integrity of the manual or electronic system or systems by which premises must provide the officers will all reasonable facilities and such records are created and stored; and ii. Compliance with laws, rules and regulations, particularly in relation to customs assistance for the effective exercise of the officer’s authority. valuation, tariff classification, country of origin and compliance with regulatory requirements, with the end in view of collecting the proper duties and taxes. 33 34 POWER OF THE COMMISSIONER TO DOCUMENTS WRITTEN IN A FOREIGN OBTAIN INFORMATION AND ISSUE LANGUAGE SUMMONS. For the effective implementation of the post clearance audit functions of Where a document in a foreign language is the Bureau, the Commissioner is hereby authorized to: presented to a customs officer said GEN Z GEN Z a. Obtain on a regular basis from any person, in addition to the person who is the subject of a post clearance audit or investigation, or from any office or officer of the national and local document must be accompanied with a governments, government agencies and instrumentalities, including the BSP and GOCCs, any information such as costs and volume of production, receipts or sales and gross income translation in English, certified correct of taxpayers, and the names, addresses, and financial statements of corporations, regional operating headquarters of multinational companies, joint accounts, associations, joint PRIME PRIME ventures or consortia and registered partnerships, and their members, whose business under oath by a translator accredited by the operations or activities are directly or indirectly involved in the importation or exportation of imported goods or products manufactured from imported component materials; DOF or by the relevant foreign embassy, or b. Summon the person liable for duties and taxes or required to file goods declaration, or any officer or employee of such person, or any person having possession, custody, or care of the consular office. books of accounts and other accounting records containing entries relating to the business of the person liable for duties and taxes, or any other person, to appear before the Commissioner or the duly authorized representative at a time and place specified in the summons and to produce such books, papers, records, or other data, and to give testimony; 35 36  PRIOR DISCLOSURE PROGRAM (PDP) POWER OF COMMISSIONER Who may avail: c. Take such testimony of the person concerned, under 1. Any importer without waiting for the issuance of an ANL, may avail of the PDP by: oath, as may be relevant or material to such inquiry; or a. Submitting the duly accomplished application form prescribed by BOC GEN Z obtain information from banks or other financial institutions on commercial documents and records pertaining specifically to payments relevant to import GEN Z for prior disclosure stating the errors in goods declaration; and b. Tendering payment of the deficiency duties and taxes, if applicable. 2. Any importer who has received an ANL, may still avail of the PDP by submitting the duly accomplished application form for prior disclosure stating transaction. PRIME But Commissioner cannot inquire into bank deposits of PRIME the errors in goods declaration and tendering payment of the deficiency duties and taxes and penalties within a period of 90 days from receipt of ANL. Importer may amend the PDP application and pay additional deficiency duties, taxes and penalties within an additional non-extendible period of 30 days from importers. the filing of PDP application, should there be any adjustments to the original application or new issues discovered that need to be disclosed. 37 38 EFFECTS OF PRIOR DISCLOSURE EXCLUSIONS FROM THE PDP PROGRAM Instead of penalties imposed under CMTA, Section 1005 imposed after the conduct of post clearance audit, the following shall be imposed on approved applications for PDP: 1. Goods declarations which are the subject 1. For a PDP applicant who has not yet received an ANL, payment of the deficiency of pending cases with any other customs in duties and taxes plus legal interest of 20%/annum from date of final office; GEN Z 2. Goods declaration which are covered by assessment; GEN Z 2. For a PDP applicant who has received an ANL and availed of the program payment of deficiencies plus penalty of 10% surcharge and 20%/annum legal interest; 3. For PDP applicant who has made disclosure on royalties and other proceeds of and PRIME cases already filed and pending in courts; PRIME any subsequent resale, disposal or use of the imported goods that accrues directly or indirectly to the seller or on any subsequent adjustment to the PAPP, payment of deficiency duties and taxes without penalty and interest provided that the applicant files PDP within 30 days from the date of payment or accrual or subsequent proceeds to the seller, directly or indirectly, or from the date of 3. Goods declarations involving fraud. adjustments to PAPP. Upon failure to pay within 30 days, the disclosure shall be subject to either (1) or (2) above. 39 40 VERIFICATION AND ACTION ON THE INTEREST ON DEFICIENCY DUTIES AND PDP APPLICATION TAXES PLUS FINE OR PENALTY 1. PCAG shall verify the completeness of the PDP application form including payment of duties and taxes and other supporting documents. Failure to comply with the necessary documentation shall result in the non-acceptance or disapproval of the application; 2. The audit team shall then verify the accuracy of the deficiency duties and taxes computation An interest of 20% per annum, counted from the 3. complete PDP documents. GEN Z and determines if all errors are fully disclosed. The verification and approval of the PDP application shall be completed within the period of 90 days from the submission of the In relation to the specific goods declaration subject of the prior disclosure application, when there are findings of fraud or when there are other material inaccuracies, mistakes or errors in GEN Z date of final assessment shall be imposed on: a. Prior Disclosure Program availment; b. Deficiency duties, taxes and other charges; and PRIME PRIME the goods declaration or outright violations committed that are not subject of the disclosure but has an adverse impact on government revenue, PCAG shall recommend to the 4. Commissioner the conduct of a formal and full audit. In all cases, the tender of payment shall be accepted by BOC to be applied to the deficiencies c. Fine or penalty, if any. in duties and taxes including penalties, interest, fine or surcharge voluntarily disclosed regardless of whether the prior disclosure application is approved or denied by the Commissioner. Any request for waiver of penalties, interest, fine, or surcharge made by the importer shall be subject to the final approval of the Secretary of Finance 41 42 REMEDIES OF THE BUREAU OF REMEDIES OF THE IMPORTER CUSTOMS When the request for reconsideration or Remedies of BOC for the collection of duties, reinvestigation is denied by the Commissioner, taxes or other charges resulting from the conduct GEN Z the importer may appeal such denial to CTA within 30 days from receipt of the adverse ruling GEN Z of post clearance audit shall be obtained by distraint, levy upon real property or civil or or decision of the Commissioner. criminal action. PRIME PRIME 43 44 ADMINISTRATIVE AND CRIMINAL ADMINISTRATIVE AND CRIMINAL OFFENSES: FAILURE TO KEEP OFFENSES: FAILURE OR REFUSAL TO RECORDS GIVE FULL AND FREE ACCESS 1. Suspension or cancellation of BOC accreditation as importer 1. Suspension or cancellation of BOC accreditation as importer or customs broker; or customs broker; 2. Punishment for contempt, for contumacy or for refusal to provide access, from GEN Z GEN Z the proper court having criminal jurisdiction over the matter; 2. Surcharge of 20% on the dutiable value of the goods which 3. Re-assessment of the importation subject of audit, the declared TV being is subject of the importation for which no records were kept; presumed to inaccurate applying therein the correct valuation method, tariff classification, quantity and/or country of origin, as applicable, based on available 3. Hold delivery or release of subsequent goods to answer for data; PRIME the fine and any revised assessment; 4. Criminal prosecution punishable with imprisonment or not less than 3 years and 1 day but not more than 6 years, and/or 4. 5. PRIME Surcharge of 20% on DV of the goods which is the subject of the importation for which no records were kept and maintained; Hold delivery or release of subsequent imported goods to answer for the fines and any revised assessment; fine of P1.0 million; and 6. Criminal prosecution punishable with imprisonment of not more than 3 years 5. Waiver of the right to contest the results of the audit based and 1 day but not more than 6 years and/or a fine of P1.0 million. on records kept by BOC. 45 46 FAILURE TO PAY CORRECT DUTIES RECORDS TO BE KEPT BY BOC AND TAXES ON IMPORTED GOODS The Bureau shall keep a database of importer and broker profiles which shall include a record of audit results and the following information and papers; Any person who, after being subjected to post clearance audit and examination, is found to have incurred deficiencies in duties and taxes paid for imported goods, shall be penalized according to a. Articles of Incorporation; two (2) degrees of culpability subject to any mitigating, aggravating, or extraordinary factors that b. The company structure, which shall include but not limited to incorporators and GEN Z GEN Z are clearly established by available evidence as described hereunder: board of directors, key officers, and organizational structure; TWO DEGREES OF CULPABILITY c. Key importations; a. Negligence. – When a deficiency results from an offender’s failure, through an act or acts of d. Importation privileges enjoyed; omission or commission, to exercise reasonable care and competence in ensuring that a e. Record of violations and penalties: statement made is correct, the offender shall be charged for committing negligence, and, if PRIME 1. Infringement committed; b. found guilty shall be penalized with a fine equivalent to one hundred twenty five percent (125%) of the revenue loss: Provided, No substantial penalty shall be imposed on an inadvertent error amounting to simple negligence, as defined by rules promulgated by the Secretary of Finance, upon recommendation of the Commissioner; amd Fraud. – When the material false statement or act in connection with the transaction was PRIME 2. Instances of prohibited importation; 3. Instances of smuggling; 4. Instances of technical smuggling f. Risk categories; committed or omitted knowingly, voluntarily and intentionally, as established by clear and convincing evidence, the offender who is charged for committing fraud and is found guilty g. Audit results; and thereof, shall be penalized with a fine equivalent to six (6) times of the revenue loss and/or h. Other information and documents from the various offices of BOC that may be imprisonment of not less than two (2) years, but not more than eight (8) years. 47 necessary in order to facilitate the conduct of post clearance audit. 48 End of Presentation THANK YOU! 49