I just read the final draft of The Customs and Tariff Modernization Act of 2008. Some provisions was added and certain provisions were amended so it can be more applicable in current times. As a customs administration student, one of the problems is that the section numbers is changed. Once we graduate and this bill was passed, we would have to start from scratch as in memorizing and studying EVERYTHING!! I like the format and how it is logically arranged and I admit some of the new provisions is already being implemented by CMOs and CAOs but it will be so much pain in the butt for CA students like me. It is as though the past 4 years studying and memorizing the sections of the tariff and customs code has all amounted to nothing. I maybe overreacting but the last couple of years studying was not walk in the park.
There are some provisions that I find to be vague but only one that I find repulsive. Look at subsection 2 (in red font)
"SEC. 113. EXAMINATION OF THE GOODS
(1) TIME REQUIRED FOR EXAMINATION OF GOODS
WHEN THE EXAMINATION OF GOODS IS REQUIRED BY CUSTOMS, SUCH EXAMINATION SHALL TAKE PLACE AS SOON AS POSSIBLE AFTER THE GOODS DECLARATION HAS BEEN LODGED.
WHEN SCHEDULING EXAMINATIONS, PRIORITY SHALL BE GIVEN TO THE EXAMINATION OF LIVE ANIMALS AND PERISHABLE GOODS AND TO OTHER GOODS WHICH CUSTOMS CONSIDER AS URGENTLY NEEDING EXAMINATION.
CUSTOMS AND OTHER AGENCIES CONCERNED SHALL COME OUT WITH A SYSTEM OF
COORDINATION AND JOINT EXAMINATION OF GOODS WHICH MUST BE INSPECTED BY THE LATTER UNDER EXISTING LEGISLATION.
(2) PRESENCE OF THE DECLARANT AT EXAMINATION OF GOODS
AS A GENERAL RULE, CUSTOMS MAY EXAMINE GOODS WITHOUT THE PRESENCE OF THE DECLARANT OR AN AUTHORIZED REPRESENTATIVE. HOWEVER, IF THE DECLARANT SO REQUESTS, HE OR AN AUTHORIZED REPRESENTATIVE SHALL BE ALLOWED TO BE PRESENT UNLESS SERIOUS, EXCEPTIONAL CIRCUMSTANCES EXIST TO BAR THEIR PRESENCE.
IF CUSTOMS DEEM IT USEFUL, THEY SHALL REQUIRE THE DECLARANT TO BE PRESENT OR TO BE REPRESENTED AT THE EXAMINATION OF THE GOODS TO GIVE THEM ANYASSISTANCE NECESSARY TO FACILITATE THE EXAMINATION.
(3) SAMPLING BY THE CUSTOMS
SAMPLES SHALL BE TAKEN ONLY WHERE DEEMED NECESSARY BY CUSTOMS TO
ESTABLISH THE TARIFF DESCRIPTION AND/OR VALUE OF GOODS DECLARED OR TO
ENSURE COMPLIANCE WITH CUSTOMS AND RELATED LAWS. SAMPLES DRAWN SHALL
BE AS SMALL AS POSSIBLE."
When I read this section I was dumbfounded. In the seaports this may have a little effect because the importer or broker will need to pay for the use of the gantry crane used in moving the container which usually happens during the examination so there is a big chance that the importer or the broker is present during the examination. Still, there is the huge possibility that they can abuse their authority. What about shipments in airports or in the post office? Who the hell in their right mind would allow other people to open their shipment even if he is a competent authority. We are talking about Bureau of Customs here. Halerrrr!!!! Why would I put my trust on the agency that is well-known for its graft and corruption.
Thursday, October 23, 2008
Sunday, October 12, 2008
Regulated Importation
Regulated importations are imported goods that requires clearances or permit from corresponding government agencies upon each importation.
Articles that need import permit/clearance and government agencies that issues them:
Addendum: List of Regulated Import Commodities and its Administering Agencies
Articles that need import permit/clearance and government agencies that issues them:
Live Animals and Meat | Bureau of Animal Industry (BAI) |
Fruits and Plants | Bureau of Plant Industry (BPI) |
Rice and Corn | National Food Authority |
Marine and Aquatic Products | Bureau of Fisheries and Aquatic Resources (BFAR) |
Medicines and the like | Bureau of Food and Drugs (BFAD) |
Chlorofluorocarbon and other Ozone Depleting Substances | Department of Environment and Natural Resources (DENR) |
Endangered Species | Department of Environment and Natural Resources (DENR) |
Various Chemicals used for the manufacture of explosives | Philippine National Police - Firearms and Explosives (PNP-FEO) |
Firearms, Parts, Ammunitions, etc. | Philippine National Police - Firearms and Explosives (PNP-FEO) |
Pesticides including Agricultural Chemicals | Fertilizer and Pesticide Authority |
VHS, Tapes, CDs, DVDs, etc. | Optical Media Board (OMB) |
TV, Movie, Film Print and Negatives, etc. | Movie and Television Review and Classification Board (MTRCB) |
Transceivers, Communication Equipment, etc. | National Telecommunications Commission (NTC) |
Refined Petroleum Products | Energy Regulatory Board (ERB) |
Coal and Coal derivatives | Energy Regulatory Board (ERB) |
Motor vehicles, Parts and Components | Department of Trade Industry (DTI), Board of Investments (BOI), Bureau of Import Services (BIS) |
Color Reproduction Machines | NBI and Cash Department – Bangko Sentral ng Pilipinas |
Legal tender of Philippine Currency in excess of P10,000 | Bangko Sentral ng Pilipinas |
Addendum: List of Regulated Import Commodities and its Administering Agencies
Prohibited Importations
Prohibited importations are imported goods that cannot be brought in the country under existing laws and regulations except otherwise permitted under strict conditions and regulations from corresponding government agency.
There are two kinds of prohibited importations:
1. Absolutely prohibited - these are goods the importation of which is not allowed under existing laws.
2. Conditionally prohibited - these are goods that cannot be brought into the country except when authorized by law and permitted by corresponding government agencies under strict guidelines and regulations.
The list of prohibited import articles is written in the Sec. 101 of the Tariff and Customs Code of the Philippines (TCCP), as amended.
Other provisions prohibiting importation of certain goods:
Republic Act No. 4653 - used clothing, rags
Letter of Instructions no. 1264 - toy guns
Republic Act No. 8293 - articles that violates the intellectual property rights (pirated cd, dvd, imitation products)
Endangered species classified under CITES Appendix I
There are two kinds of prohibited importations:
1. Absolutely prohibited - these are goods the importation of which is not allowed under existing laws.
2. Conditionally prohibited - these are goods that cannot be brought into the country except when authorized by law and permitted by corresponding government agencies under strict guidelines and regulations.
The list of prohibited import articles is written in the Sec. 101 of the Tariff and Customs Code of the Philippines (TCCP), as amended.
Other provisions prohibiting importation of certain goods:
Republic Act No. 4653 - used clothing, rags
Letter of Instructions no. 1264 - toy guns
Republic Act No. 8293 - articles that violates the intellectual property rights (pirated cd, dvd, imitation products)
Endangered species classified under CITES Appendix I
INCOTERMS
Sending goods from one country to another, as part of commercial transaction, can be risky business. If they are lost or damaged, or if delivery does not take place some other reason, the climate of confidence between parties may degenerate to the point where a lawsuit is brought. However, above all, sellers and buyers in international contracts want their deals to successfully complete.
In import and export trade, merchants wishing to have commercial transactions should specify that their contracts are governed by internationally accepted rules pertaining to where the responsibility for the goods is transferred from the seller to the buyer. This gave rise to the development of earlier INCOTERMS.
What are INCOTERMS?
INCOTERMS are rules governing the placing of goods at the disposal of the buyer at the named point of delivery for their loading on the conveyance (vessel, aircraft). The INCOTERMS, likewise establish the relationships of the seller and the buyer insofar as:
1. Duties and responsibility is concerned.
2. Specific charges to be shouldered.
3. All risks of the goods from the date of expiration of the period fixed that should be borne.
4. Assistance required in obtaining documents which are issued in the country of origin.
If, when drawn up their contract. buyer and seller specifically refer to one of the International Chamber of Commerce (ICC) Incoterms, they can be sure of defining their respective responsibilities, simply and safely. In so doing they eliminate any possibility of misunderstanding and subsequent dispute.
Purpose of INCOTERMS:
1. To provide a set of international rules for the interpretation of the most commonly used trade terms in foreign trade. The uncertainties of different interpretation of such terms in different countries can be avoided or at least reduced to a considerable degree.
2. To provide a set of international rules for the interpretation of trade terms.
3. To remedy problems related to misunderstanding, disputes and litigation considering the waste of money that entails.
- From the hand-out given by Mr. Henry R. Austria
For the List of Incoterms click here to download it in a microsoft word document.
In import and export trade, merchants wishing to have commercial transactions should specify that their contracts are governed by internationally accepted rules pertaining to where the responsibility for the goods is transferred from the seller to the buyer. This gave rise to the development of earlier INCOTERMS.
What are INCOTERMS?
INCOTERMS are rules governing the placing of goods at the disposal of the buyer at the named point of delivery for their loading on the conveyance (vessel, aircraft). The INCOTERMS, likewise establish the relationships of the seller and the buyer insofar as:
1. Duties and responsibility is concerned.
2. Specific charges to be shouldered.
3. All risks of the goods from the date of expiration of the period fixed that should be borne.
4. Assistance required in obtaining documents which are issued in the country of origin.
If, when drawn up their contract. buyer and seller specifically refer to one of the International Chamber of Commerce (ICC) Incoterms, they can be sure of defining their respective responsibilities, simply and safely. In so doing they eliminate any possibility of misunderstanding and subsequent dispute.
Purpose of INCOTERMS:
1. To provide a set of international rules for the interpretation of the most commonly used trade terms in foreign trade. The uncertainties of different interpretation of such terms in different countries can be avoided or at least reduced to a considerable degree.
2. To provide a set of international rules for the interpretation of trade terms.
3. To remedy problems related to misunderstanding, disputes and litigation considering the waste of money that entails.
- From the hand-out given by Mr. Henry R. Austria
For the List of Incoterms click here to download it in a microsoft word document.
Get more information about Incoterms in Wikipedia.
Saturday, September 27, 2008
Customs Duties and VAT Calculator
Thank God, I finished it!! I made a customs duties and vat calculator using Visual Basic 6.0. It was not as easy as I imagined since I forgot some of the codes and syntaxes. The last time I used VB6 is in 4th year high school and with todays crazy life that is like gazillion years ago.
It is just an ordinary calculator. It can compute up to 4 items (shipped together). You need to input the cost, shipping cost (total shipping cost of all items), rate of exchange, rate of duty for each item and the total excise tax if there is any. The calculator is only applicable on importations through mail (ems, naia, post office).
Click the link below to download the file (.exe file):
Customs Duties and VAT Calculator
If there are any bugs, suggestions or you want more features to be added (please nothing too ambitious for my powers), please write it on the comments section.
Hope it helps :)
It is just an ordinary calculator. It can compute up to 4 items (shipped together). You need to input the cost, shipping cost (total shipping cost of all items), rate of exchange, rate of duty for each item and the total excise tax if there is any. The calculator is only applicable on importations through mail (ems, naia, post office).
Click the link below to download the file (.exe file):
Customs Duties and VAT Calculator
If there are any bugs, suggestions or you want more features to be added (please nothing too ambitious for my powers), please write it on the comments section.
Hope it helps :)
Tax and Duty-Free Importations
Tax and Duty-Free Importations - refers to the bringing of goods from the country of origin through a normal business transaction process wherein the payment of the corresponding duties on the goods involved as well as the value added tax (VAT) for the said transaction, are waived.
What kind of articles included and certain conditions to be met:
Duty-free importations:
Section 105 of Tariff and Customs Code of the Philippines as amended
VAT exemptions:
Section 109 of the National International Revenue Code
Other provisions: (to be updated)
Republic Act No. 8502 - Jewelry Industry Development Aft of 1998
Annex "A" and "B" of the implementing rules and regulations covering raw materials and capital equipment eligible for duty-free and excise tax-free importation by qualified jewelry enterprise.
Executive Order No. 209
Guidelines and procedures for the availment by commercial fishers of the tax and duty exempt importation of fishing vessels, equipment and paraphernalia and tax and duty rebates on fuel consumption provided for under section 35 of RA 8550 otherwise known as the Philippine Fisheries Code of 1998
What kind of articles included and certain conditions to be met:
Duty-free importations:
Section 105 of Tariff and Customs Code of the Philippines as amended
VAT exemptions:
Section 109 of the National International Revenue Code
Other provisions: (to be updated)
Republic Act No. 8502 - Jewelry Industry Development Aft of 1998
Annex "A" and "B" of the implementing rules and regulations covering raw materials and capital equipment eligible for duty-free and excise tax-free importation by qualified jewelry enterprise.
Executive Order No. 209
Guidelines and procedures for the availment by commercial fishers of the tax and duty exempt importation of fishing vessels, equipment and paraphernalia and tax and duty rebates on fuel consumption provided for under section 35 of RA 8550 otherwise known as the Philippine Fisheries Code of 1998
About This Blog
Welcome to my blog!
I am a 4th year college student studying B.S. Customs Administration. The primary aim of this blog is to share my knowledge about customs administration. Some people (mostly ebayers) has a hard time dealing with the BOC since they have little knowledge about the customs and tariff laws. Most of them gets into a predicament that can be avoided if only they know better.
On my next posts, I will put up some faqs, guidelines and maybe a duties and taxes calculator as soon as I finished programming it.
I hope through this blog, I will be able to help lots of people.
I am a 4th year college student studying B.S. Customs Administration. The primary aim of this blog is to share my knowledge about customs administration. Some people (mostly ebayers) has a hard time dealing with the BOC since they have little knowledge about the customs and tariff laws. Most of them gets into a predicament that can be avoided if only they know better.
On my next posts, I will put up some faqs, guidelines and maybe a duties and taxes calculator as soon as I finished programming it.
I hope through this blog, I will be able to help lots of people.
Friday, September 26, 2008
Importation 101
What articles are subject to duty?
According to Section 100 of the Tariff and Customs Code of the Philippines as amended:
"All articles, when imported to the Philippines, are subject to duty upon each importation, even though previously exported there except as otherwise specifically provided for in the Tariff and Customs Code, as amended, or in other laws."
What are the different kinds of imported goods?
Kinds of Imported goods
Are there articles subject to duty and vat exemptions?
Yes, there are. Articles under Section 105 of TCCP as amended are duty-free importation but certain conditions (e.g. posting of re-exportation bond, permits, clearances) must be met to avail of this privilege; while vat-exempted articles are listed under Section 109 of the National Internal Revenue code of the Philippines (NIRC).
Aside from customs duties and vat, what other duties, taxes and other charges that can be levied on imported goods or during importation of goods?
Excise Tax- tax imposed on luxury goods and non-essential goods like spirits, wines, cigarettes, some petroleum products, yachts, motored vehicles etc.
Anti-dumping duty - additional duty levied aside from normal customs duties to counter the effects of "dumping". Dumping is a form of price discrimination between two national markets. It occurs when foreign producers sell their products to an importer in the domestic market at prices lower than in their own national markets , or at prices below cost of production which causes injury or threatens to injure the domestic industry producing like or comaprable products or retards the establishment of a potential industry.
Countervailing duty - a special duty levied, in addition to the regular duty and other charges, by an importing country on its imports which have been found to be subsidized in the country of origin or exportation.
Customs Documentary Stamps - fee collected for the affixing of customs documentary stamps (250 pesos).
BIR stamp - fee collected for the affixing of BIR stamp (15 pesos)
Import Processing Fee - fee collected for the prcoessing of imported goods. It depends on the total dutiable value (CIF value) of imported goods.
Warehouse storage fee - fee collected on imported goods that are not expeditiously removed and cleared from the customs bonded warehouse.
Fines and surcharges - penalties imposed on goods violating tariff and customs laws and regulations.
Other fees - fees that are normally assessed against items that require review or examination, certifications, quarantine or similar services that are required upon import by the corresponding government agency.
According to Section 100 of the Tariff and Customs Code of the Philippines as amended:
"All articles, when imported to the Philippines, are subject to duty upon each importation, even though previously exported there except as otherwise specifically provided for in the Tariff and Customs Code, as amended, or in other laws."
What are the different kinds of imported goods?
Kinds of Imported goods
- freely importable goods - importable goods that are neither regulated or prohibited. These goods can be imported without clearance or permit from corresponding government agencies.
- regulated importations - imported goods that requires clearances or permit from corresponding government agencies upon each importation.
- prohibited importations - imported goods that cannot be brought in the country under existing laws and regulations except otherwise permitted under strict conditions and regulations from corresponding government agency (conditionally prohibited).
Are there articles subject to duty and vat exemptions?
Yes, there are. Articles under Section 105 of TCCP as amended are duty-free importation but certain conditions (e.g. posting of re-exportation bond, permits, clearances) must be met to avail of this privilege; while vat-exempted articles are listed under Section 109 of the National Internal Revenue code of the Philippines (NIRC).
Aside from customs duties and vat, what other duties, taxes and other charges that can be levied on imported goods or during importation of goods?
Excise Tax- tax imposed on luxury goods and non-essential goods like spirits, wines, cigarettes, some petroleum products, yachts, motored vehicles etc.
Anti-dumping duty - additional duty levied aside from normal customs duties to counter the effects of "dumping". Dumping is a form of price discrimination between two national markets. It occurs when foreign producers sell their products to an importer in the domestic market at prices lower than in their own national markets , or at prices below cost of production which causes injury or threatens to injure the domestic industry producing like or comaprable products or retards the establishment of a potential industry.
Countervailing duty - a special duty levied, in addition to the regular duty and other charges, by an importing country on its imports which have been found to be subsidized in the country of origin or exportation.
Customs Documentary Stamps - fee collected for the affixing of customs documentary stamps (250 pesos).
BIR stamp - fee collected for the affixing of BIR stamp (15 pesos)
Import Processing Fee - fee collected for the prcoessing of imported goods. It depends on the total dutiable value (CIF value) of imported goods.
Warehouse storage fee - fee collected on imported goods that are not expeditiously removed and cleared from the customs bonded warehouse.
Fines and surcharges - penalties imposed on goods violating tariff and customs laws and regulations.
Other fees - fees that are normally assessed against items that require review or examination, certifications, quarantine or similar services that are required upon import by the corresponding government agency.
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