Customs Warehousing CAO 01-2022 PDF

CUSTM103: CUSTOMS WAREHOUSING 1st. Sem | A.Y 2024-2025 CAO 01-2022 3.1. Accessories — shall refer to goods which are neither raw Introduction. This Customs Adminis...

CUSTM103: CUSTOMS WAREHOUSING 1st. Sem | A.Y 2024-2025 CAO 01-2022 3.1. Accessories — shall refer to goods which are neither raw Introduction. This Customs Administrative Order (CAO) materials nor supplies which enhance the finishedproducts to be implements Sections 301 and 303, Chapter 2, Title III,and exported. Sections 801 to 813, Chapter 2, Title VIII, in relation to Section 3.2. Accountable Officer — shall refer to a responsibleofficial of 204 and other relevant sections of Republic Act No. 10863, the CBW named and designated by the operator as the person, otherwise known as the CustomsModernization and Tariff Act other than himself, answerable and liable to the Bureau for all (CMTA), and consolidates all existing CAOs dealing on Customs the operational aspects of the warehouse. BondedWarehouses (CBWs). 3.3. Accredited Client/End-User — shall refer to a natural or juridical person authorized by the Bureau to be a client/end-user Section 1. Scope. This CAO applies to all types of CBWslisted in of Industry-specific CBW (ICBW). the CMTA and those that may be created by theSecretary of 3.4. Accredited Client-Exporter — shall refer to client-exporters Finance, upon the recommendation of theCommissioner pursuant accredited by the Bureau to receivefinished goods manufactured to Section 803 of the CMTA by MCBWs to be used in their registered export activities. 3.5. Airlines Customs Bonded Warehouse and Airlines Catering Section 2. Objectives. Customs Bonded Warehouse — shall refer to an 2.1. To provide the guidelines for the establishment,operation, Industry-Specific Customs Bonded Warehouses (ICBW) where supervision, and control of CBWs; supplies, spare parts, in-flight duty-free items and such other 2.2. To protect revenue through the institution of safeguard and goods necessary for the reasonable requirements of the aircraft, control measures over CBWs; its crew and passengers are restored. 2.3. To define the rights and corresponding obligations of 3.6. Alert Order — shall refer to a written Order issued by the operators of CBWs accredited sub-contractors and members; Commissioner, District Collector!, or other customs officers 2.4. To improve the level of compliance of CBW operators with authorized in writing by theCommissioner after the Lodgement of customs warehousing laws and regulations and provide penalties GoodsDeclaration and before their actual release from customs for non-compliance; custody, on the basis of derogatory information regarding 2.5. To establish, develop and implement a CBW raw materials possible non-compliance with the CMTA and other laws, rules and management system making full use of information and regulations enforced by the Bureau. communications technology and more transparent procedures 3.7. Authority to Operate — shall refer to the authority given by which would aid the Bureau in the monitoring, supervision and the Bureau allowing persons, natural or juridical, to establish and control of CBW operations; and operate a CBW. 2.6. To align Customs regulations on CBWs with international 3.8. Authority to Transfer or Sell (ATS) — shall refer to the standards and best practices document issued by the District Collector allowing transfer or sale of imported raw materials, semi-finishedproducts, or Section 3. Definition of Terms. For purposes of this CAO, the finished products to another CBW Client-Exporter, following terms are defined accordingly: Client/End-User, or Freeport Zone Locator for subsequent export. Transfers to subcontractors or members of CCBW shall be covered by Authority to Transfer only. CUSTM103: CUSTOMS WAREHOUSING 1st. Sem | A.Y 2024-2025 3.9. Automated Inventory Management System (AIMS)—shall finished products shall be exported within the period prescribed refer to the automated system to be adopted by the CBW by existing laws and regulations operator as a tool to determine and monitor the stock inventory 3.17. Client Profile Registration System (CPRS) — shall refer to of imported raw materials from the time of its entry into the the system of registration provided for Bureau stakeholders CBW up to liquidation of the covering warehousing entry.3.10. adopted under Customs MemorandumOrder (CMO) No. 39-2008. Automated Bonds Management System (ABMS) —shall refer to 3.18. Compliance Rate System (CRS) — shall refer to a the automated system to be utilized by theBureau as a tool in the procedure to be adopted by the Bureau in assessing the degree effective monitoring and cancellation of bonds for the liquidation of compliance of a warehouse operator with relevant CBW rules of raw materials/entries, and regulations and in taking any action on the CBW’'s Authority 3.11. Bureau — shall refer to the Bureau of Customs. to Operate or any extension thereof. The CRS shall be developed 3.12. Certificate of Authority to Operate — shall refer to the by the Bureau subject to review by the Department of Finance document signed by the Commissioner of Customs and issued by (DOF) and consultation with concerned stakeholders. CRS may be the Bureau to persons, natural or juridical,duly authorized to applied to accredited members of CCBWsand accredited operate a CBW, to be an accredited member, accredited subcontractors. subcontractor or accredited client/end-user stating its name, 3.19. Customs Bonded Warehouse (CBW) — shall refer to a authority (license)number, exact office and warehouse address, warehouse authorized/licensed by the Bureau to import, receive, date of grant and expiry of authority and type of the approved and store, without payment of duties and taxes and under bond, warehouse, renewable every three (3) years, after proper goods, raw materials,accessories and packing materials either reevaluation and favorable recommendation by the CBWC. formanufacture into finished products for export or storage for 3.13. Certificate of Identification (CI) — shall refer to the the account of accredited exporter/client. document certifying that the finished products to be exported is 3.20. Customs Bonded Warehouse Committee (CBWC)— shall from a particular warehousing entry, andalso to determine refer to the committee created to act on applications for the whether or not a particular entry is partially or fully consumed. establishment and operation of CBW, renewal of Authority to 3.14. Certificate of Importer Accreditation — shall refer to the Operate CBWs, application as member of a CCBW, application as document issued by the Bureau to an entity registered as subcontractor of a CBW and other related matters pertaining to importer and recognized to electronically lodge goods the operation of a CBW. declaration in the Bureau’s existing registration system. 3.21. Customs Bonded Warehouse Operator — shall refer to a 3.15. Certificate of Inspection and Loading (CIL) — shall refer to natural or juridical person who has a duly approved Authority to the document issued by the Bureau certifying the conduct of Operate a CBW issued by the Bureau. For CCBWs, CBW operator inspection over the cargo for export and its actual loading on the shall refer to the mother warehouse. exporting carrier. 3.22. Customs Premises — shall include customs offices, 3.16. Client-Exporter — shall refer to a natural or juridical facilities, warehouses, ports, airports, wharves,infrastructure and person engaged in the manufacture or export of products other premises over which the Bureau shall have exclusive utilizing goods, raw materials, accessories and packing materials control, direction, and management for customs purposes. sourced from a CBW and members subject to the condition that 3.23. Diversion — shall refer to a violation of customs law committed when an imported material entered through the CUSTM103: CUSTOMS WAREHOUSING 1st. Sem | A.Y 2024-2025 warehousing scheme and destined for transit to a particular Bureau in granting authority to an operator or to be a member or CBW, Free Zone locator/enterprise, or from the CBW to the port subcontractor of a warehouse involved in the manufacture of or airport for exportation, is brought to some place other than its garments or textile for export. intended destination. 3.31. Goods — shall refer to articles, wares, merchandise and 3.24. Entry — shall refer to the act, documentation, and process any other items which are subject of importation or exportation. of bringing imported goods into the customs territory, including 3.32. Goods Declaration — shall refer to a statement made in goods coming from the Free Zones. the manner prescribed by the Bureau and other appropriate 3.25. Examination and Storage Area — shall refer to an area of a agencies, by which the persons concerned indicate the procedure CCBW and ICBW with sufficient space for examination and to be observed in the application for the entry or admission of storage of goods. imported goods and the particulars of which the customs 3.26. Exportation — shall refer to the act, documentation, and administration shall require. process of bringing goods out of Philippine Territory. 3.33. Importation — shall refer to the act of bringing in of goods 3.27. Extension Warehouse — shall refer to a separate from a foreign territory into Philippine territory, whether for warehouse authorized by the Bureau to form part of an already consumption, warehousing, oradmission. existing CBW to optimize capacity and efficiencyin its operations. 3.34. Liquidation of Raw Materials — shall refer to the process 3.28. Free Zone — shall refer to special economic zones of accounting the usage of bonded raw materials, including registered with the Philippine Economic Zone Authority (PEZA) wastages, in the manufacture of finished products for export as under Republic Act No. 7916, as amended, duly chartered or against the importation by CBWs of raw materials using the FOM. legislated special economic zones and free ports such as 3.35. Lodgement — shall refer to the registration of a goods ClarkFreeport Zone; Poro Point Freeport Zone; John HaySpecial declaration with the Bureau. Economic Zone and Subic Bay Freeport Zone under Republic Act 3.36. Member — shall refer to an entity accredited to operate No. 7227, as amended by Republic ActNo. 9400; the Aurora under an existing CCBW established for the manufacture of Special Economic Zone underRepublic Act No. 9490, as amended; products using imported duty and tax-free raw materials or the Cagayan SpecialEconomic Zone and Freeport under Republic components subject to the condition that finished products shall Act No.7922; the Zamboanga City Special Economic Zone be exported within the period prescribed by existing laws and underRepublic Act No. 7903; the Freeport Area of Bataan under regulations.Members may either be accredited by the Bureau Republic Act No. 9728; and such other freeports as established alone or jointly with the GTIDO in case of entities engaged in the or may be created by law. manufacture of garments. 3.29. Formula of Manufacture (FOM) — shall refer to the formula 3.37. Multinational Regional Bonded Warehouse — shall refer to of conversion issued by the Industrial Technology Development an Industry-Specific CBW authorized by the Board of Institute (ITDI) to the CBW operator and members, determining Investments (BOT) in proper cases, to serve as the supply depot the raw material usage and wastages of a particular finished for the storage, deposit, safe-keeping of spare parts components, product for export and subsequent liquidation. semi-finished products and raw materials including the 3.30. Garments and Textile Industry Development Office (GTIDO) packing,covering, putting-up, marking, labeling, cutting or — shall refer to the government agency attached to altering to customer's satisfaction, mounting and/or packaging theDepartment of Trade and Industry mandated to assist the into kits or marketable lots thereof to fill up transactions and CUSTM103: CUSTOMS WAREHOUSING 1st. Sem | A.Y 2024-2025 sales made by its officers of parent companies and to serving as undertake or perform, for a definite period, certain a storage of goods purchase locally by the home office of the manufacturing operations or activities incidental to the multinational for export abroad under the supervision of the manufacture of bonded raw materials into finished products in Bureau. behalf of a CBW and members in cases where the latter’s 3.38. Multi-Purpose Declaration — shall refer to a customs facilities are insufficient to address its immediate requirements single administrative document accomplished by the importer, or or due to lack of material time to meet export commitments. his duly licensed broker, under oath and submitted to the Bureau 3.45. Supplies — shall refer to imported consumable and for purposes of declaring and identifying among others the disposable indirect materials that are needed in the nature of the article/s being imported, its value, volume, weight, maintenance, operation and production of the MCBW.Such and any relevant description thereof, whether entered through materials are not included in FOM of the finishedproducts and consumption or through warehousing which will assist the are not duty/tax-free unless authorized by the BOI or exempted Bureau in assessing the taxes and duties due on the imported by the DOF. article. 3.46. Transfer Note — shall refer to a customs document that 3.39. Perishable Goods — shall refer to goods liable to perish accompanies the transfer or transit underguard of bonded such as agricultural products, flavorings, chemicals with imported goods to a Free Zone locator/enterprise or to another maximum shelf life of six (6) months or other similar items. CBW and serves as proof of delivery or receipt of the goods at its 3.40. Physical Security Feature — shall refer to a system to intended destination duly acknowledged on its face by the secure and monitor premises, storage and production areas of Collector of Customs or his duly authorized representative. It is CBWs including the safety of personnel. also Commonly referred to as a “boatnote”. 3.41. Raw Material Liquidation System (RMLS) — shall refer to 3.47. Transit — shall refer to the customs procedure under an automated system to be adopted and utilized by the Bureau in which goods are transported under customs control from one determining the volume and value of the raw materials exported customs office to another or to a FreeZone locator/enterprise. and subject for liquidation, including the duties and taxes due on 3.48. Unauthorized Repacking — shall refer to the act of the allowableresidues/wastages/by-products and other portion of fraudulent concealment, removal, or repacking merchandise in the imported article/s, entered through warehousing, no longer any CBW; or fraudulent alteration,defacement, or obliteration of usable for the manufacture of the goods to be exported. any markings or numbers placed upon packages deposited in 3.42. Security — shall refer to any form of guaranty, such as a such warehouse, or aiding or abetting any such acts. surety bond, cash bond, standby letter of credit or irrevocable 3.49. Unauthorized Withdrawal — shall refer to the withdrawal letter of credit, which ensures the satisfaction of an obligation to of any material/goods stored in a CBW without the duly the Bureau of Customs. processed withdrawal or requisition slip, or the substitution of 3.43. Semi-finished products — shall refer to imported raw materials or finished products with local materials or goods. materials or goods that have undergone processing which shall Unauthorized withdrawal shall also include the act of directly be used in the further manufacture of finished products for transferring the imported materials to an Accredited Member or export. They are also termed as “intermediate products.” Subcontractor without passing through the physical facility of 3.44. Sub-contractor — shall refer to a person or company the CBW, or the transfer of such materials to a non-accredited accredited by the Bureau, and GTIDO in case of garments, to member or subcontractor. CUSTM103: CUSTOMS WAREHOUSING 1st. Sem | A.Y 2024-2025 3.50. Wastage Valuation Data Base (WVDB) — shall refer to a including packaging and packing materials for export bank of information and reference values which shall be utilized within a specified period. by the Bureau in assessing the taxes and duties due on the c. Customs Common Bonded Warehouse (CCBW) allowable residue/wastage/by-products or other portion of the - It is a warehouse established and duly authorized by the imported article/s which can no longer be used for the Bureau alone or jointly with GTIDO, in case of garments manufacture of the goods to be exported. industry, to import, receive, and store, duty free and under bond, raw materials and accessories, for the TYPES OF CUSTOMS BONDED WAREHOUSE account of its accredited members for manufacture into Manufacturing Customs Bonded Warehouse (MCBW) finished products for export including packaging and - It is a warehouse established for the manufacture of packing materials. products utilizing raw materials or components that are d. Industry-Specific Customs Bonded Warehouse (ICBW) imported duty and tax-free conditioned on the - It is warehouse duly authorized by the Bureau to import exportation of the finished products within the period under bond and under its name and account, goods or prescribed herein or withdrawal for domestic raw materials (except fibers, yarns, fabrics and consumption upon payment of duties and taxes, accessories for the manufacture of garments) for provided that raw materials entered for consumption storage and subsequent sale and transfer to its shall not exceed thirty percent (30%) of the volume of accredited Client/End User either for export of the raw materials ntered for warehousing. Withdrawal for bonded goods or for manufacturing into export consumption beyond thirty percent (30%) may be products, in case of raw materials. allowed by the Bureau under the meritorious - CBWs previously granted Authority to Operate either as circumstances such as but not limited to cancelled Multinational Regional Bonded Warehouse, Airlines orders, closure of CBW, or cessation of operations due Customs Bonded Warehouse or Airlines Catering to a state of calamity. Customs Bonded Warehouse shall be re-classified as A MCBW shall include: CBWs pursuant to this CAO. a. Miscellaneous Manufacturing Bonded Warehouse (MMBW). - The Bureau shall provide for the guidelines and - It is a warehouse established and duly authorized to parameters for the accreditation of end-user/clients of import, receive, and store, duty and tax free and under ICBWs, such as those engaged in international aviation, bond, raw materials, except garments and textile, for etc. manufacture into finished products, including Nonmanufacturing Customs Bonded Warehouse (NCBW) accessories, packaging and packing materials for export - Its is a warehouse where goods are stored within a specified period. duty-and-tax-free conditioned on the eventual b. Garments and Textile Customs Bonded Warehouse withdrawal of the goods for consumption and shall only - It is a warehouse established and jointly authorized by be withdrawn within the period prescribed upon the Bureau and the GTIDO to import, receive, and store payment of the corresponding duties, taxes and other duty and tax free and under bond, raw materials and charges whether or not the goods are in the same state accessories, for the manufacture of garments or textile, as imported. CUSTM103: CUSTOMS WAREHOUSING 1st. Sem | A.Y 2024-2025 Ex: Private Customs Bonded Warehouse (PCBWs) which are provisions on international express vessels, aircrafts, or trains authorized by the Bureau to import, receive and store goods for shall be exempted from import duties and taxes: Provided, That: their own accounts intended for domestic consumption. (a) Such goods are purchased only in the countries crossed by SEC. 818-821 the international vessels and aircrafts in question; and SEC. 818. Stores for Consumption. – Stores for consumption (b) Any duties and taxes chargeable on such goods in the country shall include: where they were purchased are paid. (a) Goods intended for use by the passengers and the crew on Stores necessary for the operation and maintenance of vessels, board vessels, aircrafts, or trains, whether or not sold; and aircrafts, or trains which are on board these means of transport (b) Goods necessary for the operation and maintenance of shall be exempted from import duties and taxes: Provided, vessels, aircrafts, or trains including fuel and lubricants but further, That they remain on board while these means of excluding spare parts and equipment which are either on board transport are in the customs territory. upon arrival or are taken on board during the stay in the customs territory of vessels, aircrafts, or trains used, or intended to be The Bureau shall allow the issue of stores for use on board during used, in international traffic for the transport of persons for the stay of a vessel in the customs territory in such quantities as remuneration or for the industrial or commercial transport of the customs authority deems reasonable with due regard to the goods, whether or not for remuneration. number of the passengers and the crew and to the length of the stay of the vessel in the customs territory. The Bureau should SEC. 819. Stores to be Taken Away. – For purposes of this allow the issue of stores for use on board by the crew while the chapter, "stores to be taken away" means goods for sale to the vessel is undergoing repairs in a dock or shipyard: Provided, passengers and the crew of vessels, aircrafts, or trains with a finally, That the duration of stay in a dock or shipyard is view to being landed, which are either on board upon arrival or considered to be reasonable. are taken on board during the stay in the customs territory of vessels, aircrafts, or trains used, or intended to be used, in When an aircraft is to land at one or more airports in the international traffic for the transport of persons for remuneration customs territory, the Bureau should allow the issuance of stores or for the industrial or commercial transport of goods, whether for consumption on board both during the stay of the aircraft at or not for remuneration. such intermediate airports and during its flight between such airports. SEC. 820. Exemption from Duties and Taxes of Stores. – Customs treatment of stores should apply uniformly, regardless of the The Bureau shall require a carrier to take appropriate measures country of registration or ownership of vessels, aircraft, or trains. to prevent any unauthorized use of the stores including sealing of Stores which are carried in a vessel, aircraft, or train arriving in the stores, when necessary. It shall require the removal of stores the customs territory shall be exempted from import duties and from the vessel, aircraft, or trains for storage elsewhere during taxes provided that they remain on board. Stores for its stay in the customs territory only when the Bureau considers consumption by the passengers and the crew imported as it necessary. CUSTM103: CUSTOMS WAREHOUSING 1st. Sem | A.Y 2024-2025 Vessels, aircrafts, or trains which depart for an ultimate foreign the vessels or aircrafts upon departure from the customs destination shall be entitled to take on board, exempted from territory, the information required shall be kept to the minimum duties and taxes, the following: as may be necessary for customs control. (1) Stores in such quantities as the Bureau deems reasonable with due regard to the number of the passengers and the crew, When a vessel, aircraft, or train arrives in the customs territory, to the length of the voyage or Sight, and to any quantity of such stores on board shall: stores already on board; and (a) Be cleared for consumption or placed under another customs (2) Stores necessary for the operation and maintenance of a procedure, subject to compliance with the conditions and vessel, aircraft, or train, in such quantities as are deemed formalities applicable in each case; or reasonable for operation and maintenance during the voyage or (b) Subject to prior authorization by the Bureau, be transferred flight, after due regard of the quantity of such stores already on respectively to another vessel, aircraft, or train assigned to an board. international route. Replenishment of stores that are exempted from duties and taxes shall be allowed for vessels, aircrafts, or trains which have arrived in the customs territory, and which need to replenish their stores for the journey to their final destination in the customs territory, subject to the same conditions provided in this Chapter. SEC. 821. Goods Declaration for Stores. – When a declaration concerning stores on board vessels arriving in the customs territory is required by the Bureau, the information required shall be kept to the minimum and as may be necessary for customs control. The quantities of stores which are supplied to vessels during its stay in the customs territory should be recorded on the required goods declaration concerning stores. The Bureau shall not require the presentation of a separate declaration of remaining stores on board a vessel, an aircraft or a train. No separate declaration concerning stores should be required upon departure of vessels from the customs territory. When a declaration is required concerning stores taken on board