2023 Customs Laws Review - Day 7 PDF

CLAP CUSTOMS REVIEW & CENTER FOR PROFESSIONAL DEVELOPMENT, INC. in coordination with PEDREZA CUSTOMS AND TARIFF WEBINARS Room 209, 2nd Floor, Manuel F. T...

CLAP CUSTOMS REVIEW & CENTER FOR PROFESSIONAL DEVELOPMENT, INC. in coordination with PEDREZA CUSTOMS AND TARIFF WEBINARS Room 209, 2nd Floor, Manuel F. Tiaoqui Bldg., Plaza Sta. Cruz, Manila Contacts - Globe: 09063811016 / 09068172757 Email: [email protected] FB: www.facebook.com/clap.stacruz/ 2023 CUSTOMS LAWS, RULES, REGULATIONS, ETHICS and CUSTOMS BROKER PRACTICES REVIEW – DAY 7 ADMINISTRATIVE AND JUDICIAL PROCEEDINGS PART 3 Seizure and Forfeiture; Appeals in Forfeiture Cases; Customs Settlement; Appeals. Atty. Norberto V. Castillo, CB, MBA See: CAO 10 – 2020 (Seizure and Forfeiture Proceedings and Appeals Process) SEIZURE Refers to the actual or constructive taking or bringing into custody the goods, things or chattels by virtue of a WSD issued by the Collector of Customs for violation of the CMTA. The process of holding the property for the satisfaction of any administrative fine or for the enforcement of any forfeiture under the Customs and Tariff laws. Those cases wherein articles or merchandise are ordered seized by customs authorities and made subject to the penalty of forfeiture or fine for violation of the Customs Law. Here, the issue involved is the legality of the importation. Forfeiture Refers to the acquisition of ownership by the government for an established violation of CMTA as a result of forfeiture proceedings. Nature ✓ Seizure proceedings are not actions in personam but actions in rem; ✓ Directed against the seized property and not against the owner or agent of the violator of the customs law. ✓ The property itself is the defendant. ✓ Forfeiture proceedings are purely civil and administrative, and not criminal in nature (Lazaro vs. Comm. Of Customs, 17 SCRA 36, May 14, 1966) ✓ They do not result in the conviction of the offender; Jurisdiction of Customs over seizure and forfeiture Exercise exclusive original jurisdiction over forfeiture cases under this Act. (section 202, par. j, CMTA) Properties subject to Seizure and Forfeiture 1. Goods; 2. Vehicle, Vessel or Aircraft; 3. Cargo, Store, or Supplies of a Vessel or Aircraft; 4. Package and Receptacles 1. Goods a) Goods which are fraudulently concealed in or removed contrary to law from any public or private warehouse, container yard, or container freight station under customs supervision; b) Goods, the importation or exportation of which are effected or attempted contrary to law; c) Goods of prohibited importation or exportation; d) Goods in the opinion of the District Collector, have been used, are or were entered to be used as instruments in the importation or the exportation of prohibited goods; e) Unmanifested goods found on any vessel or aircraft if manifest therefor is required. f) Goods sought to be imported or exported without going through a customs office, whether the act was consummated, frustrated, or attempted; g) Goods found in the baggage of a person arriving from abroad and undeclared by such person; h) Goods sought to be imported or exported through a false declaration or affidavit executed by the owner, importer, exporter, or consignee concerning the importation of goods; i) Goods sought to be imported or exported on the strength of a false invoice or other document executed by the owner, importer, exporter, or consignee concerning the importation or exportation of such goods; or j) Goods sought to be imported or exported through any other practice or device contrary to law by means of which such goods entered through a customs office to the prejudice of the government; k) Goods offered openly for sale or kept in storage, which were discovered in the exercise of the Commissioner’s power to inspect and visit pursuant to Section 224 of the CMTA, when proof of payment of duties and taxes cannot be presented after the lapse of 15 days. 2. Vehicle, Vessel or Aircraft a) Any vehicle, vessel or aircraft, including cargo, which shall be used unlawfully in the importation or exportation of goods; b) Any vehicle, vessel or aircraft used in conveying or transporting smuggled goods in commercial quantities within the Philippines; c) Any vessel engaging in the coastwise trade which shall have on board goods of foreign growth, produce, or manufacture in excess of the amount necessary for sea stores, without such goods having been properly entered or legally imported; d) Any vessel or aircraft into which shall be transferred cargo unloaded contrary to law prior to the arrival of the importing vessel or aircraft at the port of destination; e) Any conveyance actually used for the transport of goods subject to Forfeiture under the CMTA with its equipage or trappings, and any vehicle similarly used, together with its equipment and appurtenances. The mere conveyance of smuggled goods by such transport vehicle shall be sufficient cause for the outright Seizure; and Atty. Norberto V. Castillo, CB, MBA Page 1 of 5  CLAP CUSTOMS REVIEW & CENTER FOR PROFESSIONAL DEVELOPMENT, INC. in coordination with PEDREZA CUSTOMS AND TARIFF WEBINARS Room 209, 2nd Floor, Manuel F. Tiaoqui Bldg., Plaza Sta. Cruz, Manila Contacts - Globe: 09063811016 / 09068172757 Email: [email protected] FB: www.facebook.com/clap.stacruz/ 3. Cargo, Stores or Supplies of a Vessel or Aircraft a) Any part of the cargo, stores, or supplies, including petroleum of a vessel or aircraft arriving from a foreign port which is unloaded before arrival at the vessel’s or aircraft’s port of destination and without authority from the customs officer; and b) Sea stores or aircraft stores adjudged by the District Collector to be excessive, when the duties and taxes thereon are not paid. 4. Package and Receptacles a) Any package of imported goods which is found upon examination to contain goods not specified in the invoice or goods declaration including all other packages purportedly containing imported goods similar to those declared in the invoice or goods declaration to be the contents of the misdeclared package; b) Boxes, cases, trunks, envelopes, and other containers of whatever character used as receptacle or as device to conceal goods or are so designed as to conceal the character of such goods. Conditions for Forfeiture 1. The Forfeiture of goods shall be effected only when any of the following circumstances exists: a) The goods are in the custody or within the jurisdiction of customs officers; b) The goods are in the possession or custody of or subject to the control of the importer, exporter, original owner, consignee, agent of another person effecting the importation, entry or exportation in question; or c) The goods are in the possession or custody of or subject to the control of persons who shall receive, conceal, buy, sell, or transport the same, or aid in any of such acts, with knowledge that the goods were imported, or were the subject of an attempt at importation or exportation contrary to law. 2. Seized cargoes, stores or supplies of a vessel or aircraft arriving from a foreign port which were unloaded before arrival at the vessel’s or aircraft’s port of final destination without authority from the customs officer shall be forfeited, except if the unloading was due to accident, stress of weather, or other necessity and is subsequently approved by the District Collector 3. Vehicles, vessels or aircrafts used in carrying smuggled goods in Commercial Quantity shall be forfeited except if all of the following conditions are present: a) It is a Common Carrier; b) It has not been chartered for purposes of conveying and transporting persons or cargo; c) The owner or agent at that time of Seizure has no knowledge of and participation in the unlawful act. However, a prima facie presumption shall exist against the vehicle, vessel, or aircraft under any of the following circumstances: (a) If the conveyance has been used for smuggling before; (b) If the owner is not in the business for which the conveyance is generally used; and (c) If the owner is not financially in a position to own such conveyance. Seizure and Forfeiture pursuant to the Commissioner’s Power to Inspect and Visit (CAO 10-2020 in relation to CAO 03-2019) LETTER OF AUTHORITY Who may issue: The Commissioner shall issue the LOA; Purpose: To authorize customs officers to inspect, visit, and when necessary, demand evidence of payment of duties and taxes on imported goods openly offered for sale or kept in storage. Duration: The validity of the LOA shall commence upon issuance and shall be deemed terminated upon completion of the mission. DUTIES OF THE CUSTOMS OFFICER TASKED TO IMPLEMENT THE LOA: 1. Enter the premises where the smuggled goods are suspected to be stored in the presence of the lawful occupant or any person in possession of the goods, or in their absence, any 2 witnesses who are residents of the same locality, or barangay officials or any representative from the building management or other responsible officers; 2. Conduct an inventory of foreign goods if, upon demand, no evidence of payment is produced; 3. Prepare and sign the Inventory Report; 4. Furnish a copy of the Inventory Report to the owner, occupant or person in possession of the goods; 5. In cases of restricted or regulated goods wanting in permits, recommend the issuance of WSD; 6. Under the “plain view doctrine”, confiscate prohibited goods. SPECIAL CUSTOMS AREA For reasons of security, safety and economy, the Commissioner may constitute the premises upon which foreign goods are openly offered for sale, or kept in storage, as a special customs area for the duration of the exercise of the power to visit and inspect or other proceedings related thereto. The goods are deemed, for all intents and purposes, in customs custody. In all instances, a COO III shall be designated in the Special Customs Area for purposes of valuation and computation of duties and taxes. First Situation: No WSD yet Constructive Customs Custody for 15 days. The goods may be released upon presentation and verification of: ▪ Proof of payment of correct duties and taxes OR proof of exemption from payment of duties and taxes; ▪ Proof of local purchase and payment of correct duties and taxes by the original importer; OR Atty. Norberto V. Castillo, CB, MBA Page 2 of 5  CLAP CUSTOMS REVIEW & CENTER FOR PROFESSIONAL DEVELOPMENT, INC. in coordination with PEDREZA CUSTOMS AND TARIFF WEBINARS Room 209, 2nd Floor, Manuel F. Tiaoqui Bldg., Plaza Sta. Cruz, Manila Contacts - Globe: 09063811016 / 09068172757 Email: [email protected] FB: www.facebook.com/clap.stacruz/ ▪ Proof that the goods were locally produced or manufactured. In the event that the affected party fails to produce such evidence within 15 days, the goods shall be seized and subjected to forfeiture proceedings. Second Situation: WSD already issued Goods may be released under the following circumstances: ▪ Proof of exemption or proof of payment of duties and taxes were submitted and found to be authentic and in order; ▪ Proof of local purchase and payment of correct duties and taxes by the original importer were presented and are found to be authentic and in order; ▪ Proof was presented that the goods were locally produced or manufactured; ▪ Voluntary payment of duties and taxes, provided the claimant presented a proof of local purchase. If the owner cannot present proof of local purchase, it is presumed that he is the importer. However, if he can overcome the presumption, the goods may be released provided that an offer to settle the case by redemption shall have been made and accepted. In both cases, release of goods shall be subject to the clearance of the Commissioner, provided: The goods are not prohibited; The permits and licenses are presented in case of restricted or regulated goods; and Release is not contrary to law. SEIZURE PROCEEDINGS Issuance and Service of WSD Authority to Issue WSD The District Collector exercising territorial jurisdiction over the location of the seized goods shall have the original and exclusive authority to issue the WSD Partial Seizure of Shipment If the offense relates only to a part or portion of a shipment, only that part shall be seized or detained, provided that the District Collector is satisfied that the remainder of the shipment was not used, directly or indirectly, in the commission of the offense. Any package found upon examination to contain goods not specified in the invoice or goods declaration including all other packages purportedly containing imported goods similar to those declared in the invoice or goods declaration to be the contents of the misdeclared package shall be subject to seizure and forfeiture. Contents of the WSD Docket Number; For vessels and aircrafts, and/ or other conveyances, Collection District; the registry number, if available; Alleged violation of the CMTA and related laws, rules Consignee, owner, and/or possessor, if known; and regulations; Location of the goods; Description and quantity of the property sought to be Date Issued. seized; Determination of Probable Cause The existence of probable cause to warrant the issuance of WSD shall be determined by the District Collector within 5 working days (2 working days if perishable) from receipt of recommendation for the issuance thereof. However, the District Collector may conduct summary proceedings as deemed necessary to determine existence of probable cause. If a Release Order is issued for an alerted shipment, the District Collector shall immediately transmit the records of the case to the Commissioner for clearance and approval. The Commissioner shall, within 48 hours (24 hours if perishable) from receipt of the records, review the findings of the District Collector. When no decision is made by the Commissioner within the prescribed period, the alerted goods shall be deemed released. The Alert Order shall be lifted. If the Commissioner issues an Order reversing the Release Order, the same shall be referred to the District Collector for the issuance of the appropriate WSD. Service of WSD The District Collector shall direct the ESS to serve the WSD within 3 working days from issuance: To the warehouseman or wharfinger and the CBW/CFW Operator if the goods are still in Customs custody; To the owner of the goods or his authorized representative. The Importer, Consignee named in the BL, or possessor shall be deemed the owner of the goods. If the owner is unknown, with insufficient address, or a foreign entity, service shall be by posting of the WSD by the ESS in the bulletin board of the Collection District Office, and by electronic posting the BOC Website or printed publication, for 15 days. Return of Service of WSD The ESS or duly deputized officer tasked to serve the WSD shall submit to the District Collector a return within 24 hours from the service thereof. Failure to submit shall subject the defaulting officer to appropriate administrative charges and penalties. Custody over Seized Goods Atty. Norberto V. Castillo, CB, MBA Page 3 of 5  CLAP CUSTOMS REVIEW & CENTER FOR PROFESSIONAL DEVELOPMENT, INC. in coordination with PEDREZA CUSTOMS AND TARIFF WEBINARS Room 209, 2nd Floor, Manuel F. Tiaoqui Bldg., Plaza Sta. Cruz, Manila Contacts - Globe: 09063811016 / 09068172757 Email: [email protected] FB: www.facebook.com/clap.stacruz/ Upon service of the WSD, the ESS or duly deputized officer shall immediately seize the goods, either physically or constructively, and turn over the same to the District Collector through the ACDD or its equivalent unit. The ACDD and ESS shall jointly secure and safekeep the seized goods. The Collector shall cause the inventory and examination of the seized goods. Custody over seized goods requiring immediate turn-over to Regulating Agencies Immediate turn-over FORFEITURE PROCEEDINGS Forfeiture Proceedings Venue shall be at the Law Division of the District which issued the WSD. For Districts without Law Division, the venue shall be at the Office of the District Collector. If goods has been sufficiently established to be prohibited, it shall be ipso facto forfeited. If within 15 days after service of WSD and due notice, no owner or agent can be found or appears before the District Collector, the goods shall be forfeited ipso facto to disposed of accordingly. Pleadings, Notices and Appearances All pleadings shall be filed personally, registered mail, or private courier service, with the Law Division or Office of District Collector. Soft copies shall also be submitted simultaneously by e-mail or in an externa drive. If via private courier, the date of receipt shall be considered the date of filing. Pleadings filed beyond the reglementary period shall be considered as mere scrap of paper. Where WSDs involve the same consignees, commodity and violation, these cases may be consolidated with the lower/lowest docket number. A lawyer appearing must be duly authorized by the claimant. All his pleadings and motions must indicate his office address, email, Attorney’s Roll Number and PTR, and MCLE Compliance. In case the claimant is a juridical entity, it may authorize a responsible officer of the company to appear. For individual claimants of goods of small value, a licensed customs broker or his authorized representative may be allowed to appear. (P50,000.00 via Informal Entry). Authorization issued by claimant currently abroad must be authenticated by the appropriate Consular Office. A party appearing without proper authorization for 2 successive hearings shall be considered as in default and authorize the presentation of the evidence ex parte. Any change or withdrawal of counsel or authorized representative shall be made in accordance with the Rules of Court. Notice of Hearing shall be served by personal service, or if not practicable, by private courier, or posting in the bulletin board of the Law Division or equivalent office for unknown claimants. Designation of Hearing Officer and Prosecutor The District Collector shall endorse the WSD to the Law Division for the assignment of a Hearing Officer. The DC may conduct hearing or may designate any lawyer assigned to the District as a Hearing Officer. If there is no lawyer assigned, the DC shall request for a Hearing Officer from the Legal Service withn 2 days from issuance of WSD. In all cases, the DC shall request a Government Prosecutor from the Legal Service within 2 days from the issuance of WSD. Hearing Proper The Hearing Officer (HO) shall immediately set the hearing the case upon receipt of the case folder or copy of WSD. After termination of the hearing, the HO shall require the claimant to submit its verified Position Paper within 5 days from date of last hearing, copy furnished the Government Prosecutor (GP). Within 5 days from receipt of Position Paper, the GP shall file its Comment, copy furnished the claimant. Within 3 days from receipt of Comment, claimant may file a Reply, copy furnished the GP After submission of the last pleading, the case will be submitted for resolution. The DC shall render a Resolution within 30 days (10 days if perishable) upon submission of the case for Resolution. Prohibited Pleadings and Motions Motion for Postponement, except if based on Acts of God or force majeure; Motion for Reconsideration; Motion for Extension of Time to File Pleadings; Motion to Quash/Recall/Lift/Set-aside or any other similar motion except as authorized; Motion to Suspend/Hold in Abeyance Forfeiture Proceedings; Motion to Re-open Remedies 1. Quashal/Recall of WSD a) In case of seized goods pursuant to Commissioner’s Power to Inspect and Visit, claimant was able to submit proofs as required; b) If DC has no territorial jurisdiction over the seized goods; c) When concerned Government Regulatory Agency has issued the necessary clearance or license. If DC allows the quashal, he shall seek clearance from the Commissioner, who shall within 30 days (10 days if peri) from receipt of the records, issue clearance to therefor. If the Commissioner reverses the quashal, the case shall be remanded to the DC for the continuation of the proceedings. The Order of the DC and Commissioner denying the Motion to Quash shall be considered interlocutory orders. 2) Payment of Surcharge for Undeclared Baggage. Atty. Norberto V. Castillo, CB, MBA Page 4 of 5  CLAP CUSTOMS REVIEW & CENTER FOR PROFESSIONAL DEVELOPMENT, INC. in coordination with PEDREZA CUSTOMS AND TARIFF WEBINARS Room 209, 2nd Floor, Manuel F. Tiaoqui Bldg., Plaza Sta. Cruz, Manila Contacts - Globe: 09063811016 / 09068172757 Email: [email protected] FB: www.facebook.com/clap.stacruz/ Undeclared dutiable goods brought by persons arriving in the Philippines shall be seized through the issuance of a Held Baggage Receipt (HBR). Release thereof shall allowed when: a) Importation is not contrary to law; b) Surcharge of 30% of the LC in addition to the duties, taxes and other charges are paid. 3) Settlement of Forfeiture Cases (Offer of Settlement) a) Payment of Fine (30% of LC); b) Redemption of Forfeited Goods (100% of LC). When Allowed: a) When there is no fraud attributable to the importer, consignee or owner; b) When the goods are not absolutely prohibited; c) When the release is not contrary to law. When Not Allowed: a) When the discrepancy in duties and taxes to be paid between what is determined and what is declared amount to more than 30%. Decision of the District Collector Within 30 days from the time the case is submitted for decision; The Decision shall include a declaration of Forfeiture or Release, Imposition of Fine or Redemption Decisions involving Settlement shall be subject to clearance and review by the Commissioner. This shall not be subject to automatic review of the SOF. Referral to Import Assessment Service (IAS) During Appeal or automatic review, the Legal Service shall refer the assessment made by the DC to IAS for review of the valuation and classification with corresponding computation of duties, taxes and other charges, or penalties, if any. IAS shall submit its recommendation within 3 hours, otherwise, the recommended settlement or redemption value by the DC stands. Appeal to the Commissioner The aggrieved importer or exporter affected by the adverse decision of the DC may appeal by filing a Notice of Appeal (NOA) with a corresponding Memorandum of Appeal (MOA) within 15 days (5 days if peri). Upon receipt of the NOA and MOA with proof of payment of Appeal Fee, the DC shall immediately transmit all the records of the case to the Appellate Division, Legal Service within 5 working days from receipt of Appeal. Soft copies shall be sent via email at [email protected]. Automatic Review The Commissioner shall automatically review any decision of the DC adverse to the government. When no Decision is rendered within the prescribed period or when a Decision adverse to the government is rendered by the Commissioner involving 10 million pesos or more FOB/FCA, the records of the Decision of the Commissioner or of the DC under review shall be elevated to the SOF within 5 working days from the lapse of the period to resolve or from the date of issuance of the Decision. The Decision of the SOF shall be final subject to appeal to the CTA. Atty. Norberto V. Castillo, CB, MBA Page 5 of 5