The Basics of Tariff & Customs Laws in the Philippines
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| The Port of Legazpi, a principal port of entry in the Philippines. Photo from Department of Tourism. |
What
are Tariff & Customs Duties?
Tariff
refers to the schedule of rates applied to goods as basis for the computation
of customs duties, which, on the other hand, are the taxes levied on certain goods.
The
passage of time has made the two terms interchangeable so you may now use the term “tariff” to refer to the tax but, originally, it was used to refer to
the book of rates only.
What
are the purposes of the imposition of Customs Duties?
·
Revenue-raising
·
Protection of local industries
·
Economic stimulation
What
are the goods subject to Customs Duties?
All
goods imported are subject to import
duties unless specifically exempted under the CMTA or special laws. (Sec. 104/CMTA)
All
goods exported are now exempt from customs duties except for logs
which remain to be subject to export
duties. (See Sec. 1612 of CMTA and
Executive Order No. 26, series of 1986, amending Sec. 514 of PD 1464)
Are
services subject to Customs Duties?
No. There is no tax provision
specifically stating that services may be subject to customs duties.
What
are importation and exportation?
- Importation refers to the act of bringing in of goods from a foreign territory into Philippine territory, whether for consumption, warehousing, or admission. (Sec. 102 [z])
- Exportation refers to the act, documentation, and process of bringing goods out of Philippine territory. (Sec. 102[s])
What goods are exempted from import duties?
- De Minimis Importations / Small Value Importations – goods with FOB or FCA value of ten thousand pesos (₱10,000.00) or below. (Sec. 423)
o The CMTA was enacted in 2015 but the threshold is still
the same. (See “De Minimis Rate in the
Philippines” here.)
- Conditionally-free Importations (See Sec. 800)
- Relief Consignment – commodities used in aid of victims of calamities. Such goods are not only exempt from duties, they are also prioritized. (Sec. 120)
o
See Joint Administrative Order No. 1-2020 issued by DOF, DSWD and other
agencies here.
What
are the types of duties?
- As to the basis for computation
o Ad
valorem – tax is computed based on the price or value of the commodity
o Specific
– tax is computed on the basis of weight, volume, capacity or any other
physical unit of measurement
- As to purpose
o Ordinary
or Regular – collected for the purpose of raising revenues
o Special
– collected for the purpose of protecting local industries
What are the types of
special duties?
- Dumping Duties – imposed upon foreign goods with prices substantially lower than local goods to the detriment of the latter.
- Countervailing Duties – imposed upon foreign goods enjoying subsidy thus allowing them to sell at lower prices to the detriment of similar local products.
- Marking Duties – imposed upon those
goods not properly marked as to the place of origin. [The purpose of incorrect marking is usually to deceive buyers.]
- Discriminatory/Retaliatory Duties – imposed upon goods coming from countries that discriminate against PH products.
- Safeguard Duties – imposed upon goods imported in the PH in increased quantities to the detriment of local products.
o Additional
Requirement for imposition as regards non-agricultural products: the DOF
Secretary shall first establish that the safeguard measures will be in public
interest. No such requirement as regards agricultural products.
Who
is responsible to pay customs duties?
The Declarant
(Sec. 107). The declarant may be the consignee or the person who has the right to dispose of the goods. (Sec. 106) Specifically, the following are considered to be declarants:
o
The importer, being the holder of the bill of lading; or
o
The exporter, being the owner of the
goods to be shipped out; or
o
A person duly empowered to act as agent or attorney-in-fact for each
holder. (Sec.106)
§
The customs broker, though may be a declarant themself, is not liable to
pay the customs duties (Sec. 107).
§
The exporter is only liable if the goods they export are logs.
§
Aside from payment of taxes, the declarant is also responsible for the accuracy
of the goods declaration, even though exempted from duties. (Sec. 107)
§
In case the consignee or the person who has the right to dispose of the
goods is a juridical person, it may authorize a responsible officer of the company
to sign the goods declaration as declarant on its behalf.
What is goods declaration?
Goods Declaration
refers to a statement made in the manner prescribed by the Bureau and other
appropriate agencies, by which the persons concerned indicate the procedure to
be observed in the application for the entry or admission of imported goods and
the particulars of which the customs administration shall require. (Sec.
102[y])
Distinguish formal entry vis-Ã -vis informal entry.
- Formal Entry – a document used to clear from customs custody commercial shipments and the form itself is filled out by the importer themself or their broker.
- Informal Entry – a document used to clear from customs custody commercial shipments worth less than ₱50,000.00 and personal and household effects filled up by the customs examiner for the owner or addressee of the parcel.
-
See Sec. 402 and Lim, p. 876.
What is Drawback?
It is a device whereby goods affected by taxes are
re-exported as if they are not taxed at all. It refers to duties or taxes paid back or remitted by the
Government on the exportation of that on which they are levied. (Lim, p. 870)
A drawback may also be refunded to companies that imported
petroleum and other oils when sold directly or indirectly to electric utilities
for the generation of electric power and the manufacture of city gas. (Sec.
900)
What are the goods that may claim Drawback?
- On Fuel Used for Propulsion of Vessels. — On all fuel imported into the Philippines used for propulsion of vessels engaged in trade with foreign countries, or in the coastwise trade.
- On Petroleum Oils and Oils Obtained from Bituminous Minerals, Crude, Eventually Used for Generation of Electric Power and for the Manufacture of City Gas. — On petroleum oils and oils obtained from bituminous materials, crude oil imported by nonelectric utilities, sold directly or indirectly, in the same form or after processing, to electric utilities for the generation of electric power and for the manufacture of city gas.
- On Goods Made from Imported Materials. — Upon exportation of goods manufactured or produced in the Philippines, including the packing, covering, putting up, marking or labeling hereof either in whole or in part of the imported materials for which duties have been paid.
o
See Secs. 900-02 for more details.
Are goods previously exported liable to Customs Duties?
Yes. According to Sec. 104, all goods imported, including
those previously exported, are subject to customs duties. See Sec. 800 (u) for
the exceptions.
Mnemonic: This
is the inverse of goods that may claim drawback.
What are the other charges and fees that are collected in connection with
the shipment of goods?
- Harbor
Fee – the amount which the owner, agent, operator
or master of a vessel has to pay for each entrance into or departure from a
port of entry in the Philippines.
o Rationale:
A vessel ordinarily enters a harbour and lays anchor or moors in a port to
load, or unload or both and in doing so, the vessel derives benefits from port
facilities maintained by the government. (Lim, p.868)
- Wharfage
Charge – the amount assessed against the cargo of a
vessel engaged in the foreign trade. The owner, consignee, or agent of either,
of the merchandise is the person liable for such charge.
o Purpose:
Wharfage charges are specifically allotted for the special Port Works Fund. (Lim,
p. 869, citing Phil. Iron Mines v. Commissioner of Customs, 30 SCRA 60, and
Victorias Milling v. Auditor General, 116 Phil. 1139)
- Berthing Charge – the amount assessed against a vessel for mooring or berthing at a pier, wharf, bulkhead wharf, river or channel marginal wharf at any port in the Philippines; or for mooring or making fast to a vessel so berthed; or for coming or mooring within any slip, channel, basin, river or canal under the jurisdiction of any port of the Philippines. The owner, agent, operator or master of the vessel is liable for this charge.
- Storage Charge – the amount assessed on merchandise for storage in customs premises, cargo sheds and warehouses of the government. The owner, consignee, or agent of either, of the merchandise is liable for this charge.
- Arrastre Charge – the amount which the owner, consignee, or agent of either, of merchandise or baggage has to pay for the handling, receiving and custody of the imported or exported merchandise or the baggage of the passengers.
§
See more: RA 1371.
- Tonnage Due – the amount paid by the owner, agent, operator or master of a vessel engaged in foreign trade, whether coming to or going out of the Philippines. (Lim, p.870)
- Value-Added Tax under NIRC.
What is Smuggling?
It refers to the fraudulent act of importing goods to the
Philippines (Sec. 102 [nn]). It is an act punishable under the CMTA. It includes:
o
Importing goods by means of fraudulent, falsified, or erroneous declaration of the goods, for the
purpose of reducing or avoiding payment of taxes and duties (technical smuggling). ~Sec. 102 (pp)
o
Importing goods without complete importation documents, or without being
cleared by customs or the government, for the purpose of reducing or avoiding
payment of taxes and duties (outright
smuggling). ~Sec. 102 (ff)
o
The act of assisting in receiving, concealing, buying, selling, disposing,
or transporting such goods with full
knowledge that the same has been fraudulently imported. (Sec. 102[nn])
o
The fraudulent exportation of goods. (Sec. 102[nn]).
What is a Port of Entry?
Port of Entry
refers to a domestic port open to both domestic and international trade,
including principal ports of entry and subports of entry.
A principal port of
entry is the chief port of entry of the Customs District wherein it is situated
and is the permanent station of the District Collector of such port.
Port of entry shall
include airport of entry.
§
Sec. 102(hh).
What is a Subport of Entry?
There is no definition in the CMTA but it appears to refer to ports of entry that are not principal ports of entry.
Where are the Principal Ports of Entry in the Philippines?
The principal ports
of entry shall be located in Aparri, San Fernando, Manila, Manila International
Container Port, Ninoy Aquino International Airport, Subic, Clark, Batangas,
Legazpi, Iloilo, Cebu, Tacloban, Surigao, Cagayan de Oro, Zamboanga, Davao,
Limay and such other ports that may be created pursuant to CMTA. (Sec. 207)
That is all for today. The procedures, remedies and the agencies empowered to collect customs duties will be posted next week.
That is all for today. The procedures, remedies and the agencies empowered to collect customs duties will be posted next week.
Assignments:
ReplyDelete1. Miguel C. Cano --- why are duties on exports abolished?
2. Risty Londonio --- how does the collection of customs duties stimulate the economy?
3. Dominic Madrid --- can you provide the definition of wharfage?
4. Gabriel Naparato --- what is arrastre?
5. Paul Jerzy Rabe --- what is berthing?
6. Vicky Joy Bernal --- what is the flexible tariff clause?
7. Haerim-Mai-Lin Bolanos --- what is the difference between prohibited and restricted importations?
8. Shamille Gigantone --- what are the differences between specific and special duties?
9. Evelyn Lumbis --- what are the ports of entries in Bicol Region other than Legazpi?
10. Sarah Madronio --- what is the relation of technical smuggling to smuggling?
11. Cielo Marcaida --- is smuggling possible in exporting products? why or why not? what is the rationale?
12. Ina Samantha Miraflor --- what are the goods subject to dumping duties today?
13. Jonalyn Mirafuentes --- what are the goods subject to countervailing duties today?
14. Charmen Mae Miranda --- what are the goods subject to marking duties today?
15. Ma. Nexevikki Morota --- what are the goods subject to discriminatory duties today?
16. Sheina Marie Onrubia --- what are the goods subject to safeguard duties today?
17. Julie Ann Purisima --- what are the differences between FOB and FCA?
18. Danica Yap --- what is the Tariff Commission?
All questions and answers in this assignment are included in the term exams.
The difference between prohibited and restricted importations are mainly on how each item of importation is treated by the government, whether or not such item, despite its perceived character, be allowed to enter the importing country.
DeletePhilippine Law restricts/prohibits the importation of certain goods for reasons of national security, environmental and public health protection and order and morality, in addition to complying with international treaties and obligations. However, when it is "restricted importation", the items can still be imported provided they comply to the procedures and barriers set by the government in its importation. They are carefully monitored and one of the main objectives for the restriction, aside from concerns involving public health security and the like, is that such goods will not weaken economic status of the importing country. The government makes use of clearances or licenses to implement said restrictions.
In the case of "prohibited importation" no such leeway is given. Prohibited imports are not allowed in any sense or form to enter the importing country.
References:
1. https://www.trade.gov/knowledge-product/philippines-import-requirements-and-documentation
2. https://howtoexportimport.com/How-to-differentiate-Prohibition-to-import-and-res-1103.aspx
3. https://buenosairespe.dfa.gov.ph/87-comunidad-filipina/243-items-that-are-considered-restricted-or-prohibited-from-importation
5. What is berthing?
DeleteBerthing is the process of mooring a ship in its allotted place; or, to allot a vessel a certain space at which to anchor or tie up. (dictionary.com) Berthing means tying up against a harbour wall or pontoon (legal dictionary).
Berthing charge is the amount assessed against a vessel for mooring or berthing at a pier, wharf, bulkheadwharf, river or channel marginal wharf at any port in the Philippines; or for mooring or making fast to a vessel so berthed; or for coming or mooring within any slip, channel, basin, river or canal under the jurisdiction of any port of the Philippines. The owner, agent, operator or master of the vessel is liable for this charge (Paragraph c, Section 1 of RA 1371).
Wharfage charge is the amount assessed against the cargo of a vessel engaged in the foreign trade, based on the quantity, weight or measure received and/or discharged by such vessel. The owner, consignee, or agent of either, of the merchandise is the person liable for such charge.
Deletehttps://lawphil.net/statutes/repacts/ra1955/ra_1371_1955.html
Dominic Madrid
HMB grade: 94.
DeleteFollow-up questions:
Can you give at least 3 examples of each type of importation?
Rabe: 92.
DeleteFF-up question: who are the people authorized to do the berthing? Is there a specific type of person commissioned to do this activity?
Madrid: 75.
DeleteFF-up question: who are the people authorized to do the berthing? Is there a specific type of person commissioned to do this activity?
DeleteThe full responsibility for the operations of berthing and of mooring a ship has traditionally been entrusted to the crew on board assisted by a local pilot. In the Philippines however, a government agency called Philippine Ports Authority (PPA) collects berthing charge. This is the amount assessed against a vessel for mooring or berthing at a pier, wharf, bulkheadwharf, river or channel marginal wharf at any port in the Philippines; or for mooring or making fast to a vessel so berthed; or for coming or mooring within any slip, channel, basin, river or canal under the jurisdiction of any port of the Philippines. The owner, agent, operator or master of the vessel is liable for this charge.
Sections 4, 5, and 6 of Republic Act No. 1371 also known as “An Act to Define, Classify, Fix And Regulate the Amount of All Charges and Fees in Philippine Ports, Other Than Customs Duties, Internal Revenue Taxes and Tonnage Dues” discusses the Berthing Charge applicable to three types of Vessels: (1) Foreign Trade (Section 4), (2) Non-Cargo Vessels (Section 5), and (3) Vessels in Philippine Coastwide Trade (Section 6).
Another government agency called Maritime Industry Authority (MARINA) shall determine the sailing schedules and frequencies for domestic shipowners or operators applying for Certificate of Public Convenience (CPC) or Special Permit (SP) in the liner trade in order to ensure reasonable schedule of trips, frequencies or time spacing.
Lastly, the government agency called Philippine Coast Guard (PCG), by virtue of R.A. 5173 was vested with the authority to conduct vessel inspections including all foreign-flagged vessels for the promotion of safety of life and property at sea, control and prevention of marine pollution and verification of compliance with the minimum standards of training and social condition of officers and crew on board the ships. Port State Control (PSC) Centers and Divisions in each international port shall coordinate with the local port authority/operator for the availability of a copy of the daily or weekly shipping schedule (whichever is applicable). At the earliest possible opportunity, PSC Officers/Associate Members should ascertain the year of build and size of the ship to be inspected for the purpose of determining which provisions of the Conventions are applicable.
1. https://link.springer.com/chapter/10.1007%2F978-94-009-1407-0_31
2. Republic Act 1317
3. MARINA Circular No. 15, s. 2009, pursuant to P.D. 474 and E.O. 125/125-A
4. http://www.coastguard.gov.ph/index.php/memorandums/12-mc?start=10
85.
DeleteWhat are the differences between specific and specific duties?
ReplyDeleteSpecific duty and Special duty are both Tariff and Customs Duties. Specific duty however, belongs to ordinary import duties while special duty is a different category. Specific duty is a type of tarrif and custom duties categorized as to the basis of coputation while special duty is categorized as to purpose.
Specific tax is based on the weight or volume capacity and other physical unit of measurement. Specific taxes are taxes on privilege to import, manufacture, and remove from storage certain articles specified by law.
Special tax on the other hand is collected for the purpose of protecting local industries. It is levied in addition to the ordinary duties, taxes, and charges imposed by law on the imported product under the following circumstances:
1. Anti-Dumping Duties;
2. Countervailing Duties;
3. Marking Duties;
4. Discriminatory Duties;
5. General Safeguard Measures; and
6. Special Safeguard Duties.
References:
■ IM INGLES, Tax Made Less Taxing: A Reviewer with Codals and Cases
■ CIR vs Pilipinas Shell G.R. No. 188497 (2014)
■ R Andes, The Basics of Tariff & Customs Laws in the Philippines (2020)
https://legalscribbles.blogspot.com/2020/06/the-basics-of-tariff-customs-laws-in.html?m=1
■ Guide to Philippine Tax: Tariff and Customs Duties pdf.
Gigantone S.B.
92.
DeleteCan you give examples of goods subject to specific duties?
Answer for the follow up question -CAN YOU GIVE EXAMPLES OF GOODS SUBJECT TO SPECIFIC DUTIES?
DeleteSpecific Tax is imposed and based on weight or volume capacity or any other physical unit of measurement. Some of the goods covered by this duty are
1. Aviation Fuel to which it attaches as soon as they are in existence;
2. Distilled spirits such as ethyl alcohol, ethanol or spirits of wine including all dilutions, purifications, and mixtures thereof as well as rum, whisky, gin, vodka, and other similar products;
3. Medicinal preparations;
4. Flavoring extracts;
5. Cigars;
6. Petroleum products sold to an international carrier for its use and consumption outside of the Philippines when the country of said carrier does not exempt from tax the petroleum products sold to the Philippines.
7. Other goods specifically provided by the code and pertinent laws to be subject to specif tax duties.
References:
■CIR v Pilipinas Shell G.R. No. 188497 (2014)
■Section 148 (g) Tax Code
■Section 141 Tax Code
■Section 145 Tax Code
■Chevron Philippines Inc. vs COR G.R. No. 210836 -Dissenting Opinion of Justice Leonen- (2015)
■P.D. No. 1359
■ BIR Excise Tax
Gigantone S.B.
90.
DeleteWhat is the flexible tariff clause?
ReplyDeleteThe flexible clause empowers the President to increase, reduce or remove existing rates of import duty, establish import quotas or ban imports of any commodity and impose additional duty on all imports not exceeding 10% ad valorem. Those powers are delegated to the President and exercisable only when Congress is not in session. The said powers may be withdrawn or terminated by Congress through a joint resolution.
It was provided under section 1608 of Customs Modernization and Tariff Act (CMTA) the Flexible Clause which states that - (a) in the interest of general welfare and national security, and subject to the limitations prescribed under this act, the President, upon the recommendation of the NEDA, is hereby empowered to:
1. Increase, reduce, or remove existing rates of import duty including any necessary change in classification. The existing rates may be increased or decreased to any level, in one or several stages, but in no case shall the increased rate of import duty be higher than a maximum of one hundred percent (100%) ad valorem;
2. Establish import quotas or ban imports of any commodity, as may be necessary; and
3. Impose an additional duty on all imports not exceeding ten (10%) percent ad valorem whenever necessary: Provided, that upon periodic investigations by the Commission and recommendation of the NEDA, the president may cause a gradual reduction of rates of import duty granted in section 1611 of this Act, including those subsequently granted pursuant to this section.
(b) Before any recommendation is submitted to the President by the NEDA pursuant to the provisions of this section, except in the imposition of an additional duty not exceeding ten percent (10%) ad valorem, the Commission shall conduct an investigation and shall hold public hearings wherein interested parties shall be afforded reasonable opportunity to be present, to produce evidence and to be heard. The Commission shall also hear the views and recommendations of any government office, agency or instrumentality. The commission shall submit its findings and recommendations to the NEDA within thirty (30) days after the termination of the public hearings.
(c) The power of the President to increase or decrease rates of import duty within the limits fixed in subsection (a) hereof shall include the authority to modify the form of duty. In modifying the form of duty, the corresponding ad valorem or specific equivalents of the duty with respect to imports from the principal competing foreign country for the most recent representative period shall be used as basis.
(d) Any order issued by the President pursuant to the provisions of this section shall take effect thirty (30) days after promulgation, except in the imposition of additional duty not exceeding ten percent (10%) ad valorem which shall take effect at the discretion of the President.
(e) The power delegated to the President as provided for in this section shall be exercised only when Congress is not in session.
(f) The power herein delegated may be withdrawn or terminated by Congress through a joint resolution.
The NEDA shall promulgate rules and regulations necessary to carry out the provisions of this section.
Source:
https://tariffcommission.gov.ph/tccp-provision-401
75.
DeleteYes. Smuggling is possible in exporting of products. Sec. 3519 of the Tariff and Custom Code of the Philippines define Smuggling as “an act of any person who shall fraudulently import or bring into the Philippines, or assist in so doing, any article, contrary to law or shall receive, conceal, buy, sell or in any manner facilitate the transportation, concealment, or sale of such article after importation, knowing the same to have imported contrary to law. It includes the exportation of articles in a manner contrary to law. Articles subject to this paragraph shall be known as smuggled articles.
ReplyDelete83.
DeleteIs this possible for all products?
These are goods wholly or in part the growth or product of, or imported in a vessel of any foreign country (1.) that imposes, directly or indirectly, upon the disposition or transportation in transit or through re- exportation from such country of any goods wholly or in part the growth or product of the Philippines, like any unreasonable charge, exaction, regulation or limitation which is not equally enforced upon the like goods of every foreign country or (2.) that discriminates in fact against the commerce of the Philippines, directly or indirectly, by law or administrative regulation or practice, by or in respect to any customs, tonnage, or port duty, fee, charge, exaction, classification, regulation, condition, restriction or prohibition, in such manner as to place the commerce of the Philippines at a disadvantage compared with the commerce of any foreign country. (source: Paragraph A, Section 714 of RA 10863) To put it briefly, discriminatory duties are imposed on goods/ products coming from countries or goods/ products imported in a vessel of countries who impose charges upon exported/ transported Philippines goods which are not equally enforced upon like goods of other countries These are also goods/ products coming from countries or goods/ products imported in a vessel of countries who discriminate against the commerce of the Philippines.
ReplyDelete– MOROTA, Ma. Nexevikki M.
79.
DeleteThe Tariff Commission is a government agency of the Republic of the Philippines. Its mandate and functions are prescribed under Republic Act (RA) No. 10863, otherwise known as the Customs Modernization and Tariff Act (CMTA).
ReplyDeleteTC performs both governmental and quasi-judicial functions. Under the CMTA, which updated and expanded TC’s prescribed mandate under Presidential Decree No. 1464 (s. 1978), also known as the Tariff and Customs Code of the Philippines, TC has the following functions:
1. adjudicate cases on the application of trade remedies against imports;
2. study the impact of tariff policies and programs on national competitiveness and consumer
3. welfare in line with the economic objectives of the government;
4.administer the Philippine tariff schedules and tariff nomenclatures;
5. issue advance rulings on tariff classification of imported goods and render rulings on disputes
6. over tariff classification of goods;
7. provide the President and Congress with independent analysis, information and technical support on matters related to tariff and non-tariff measures affecting Philippine industries and exports for policy guidance;
8. analyze the nature and composition, and the classification of goods according to tariff commodity classification and heading number for customs and other related purposes, which information shall be furnished certain government agencies;
9. review the trade agreements for negotiation and trade agreements entered into by the Philippines and make recommendations, if necessary, on the consistency of the terms of the agreements with the national policy objectives; and
10. conduct public consultations and public hearings pursuant to its functions.
TC is an attached agency of the National Economic and Development Authority.
(source: https://tariffcommission.gov.ph/about)
75.
Deletemirandacharmenmae@gmail.com
ReplyDeleteAnswer to number 14:
Sec. 710 of Republic Act No. of 10863 provides that all goods of foreign origin imported into the Philippines or their containers shall be conspicuously marked in any official language of the Philippines as legibly, indelibly and permanently as the nature of the goods or container will permit and in such manner as to indicate to an ultimate purchaser in the Philippines the name of the country of origin of the goods.
The exception in the above-mentioned requirements of marking is provided in paragraph 3 hereof, if:
(i) Such goods are incapable of being marked;
(ii) Such goods cannot be marked prior to shipment to the Philippines without injury;
(iii) Such goods cannot be marked prior to shipment to the Philippines, except at an expense economically prohibitive of their importation;
(iv) The marking of a container of such goods will reasonably indicate the origin of such goods;
(v) Such goods are crude substances;
(vi) Such goods are imported for use by the importer and not intended for sale in their imported or any other form;
(vii) Such goods are to be processed in the Philippines by the importer or for the importer's account other than for the purpose of concealing the origin of such goods and in such manner that any mark contemplated by this section would necessarily be obliterated, destroyed, or permanently concealed;
(viii) An ultimate purchaser, by reason of the character of such goods or by reason of the circumstances of their importation, must necessarily know the country of origin of such goods even though they are not marked to indicate their origin;
(ix) Such goods were produced more than twenty (20) years prior to their importation into the Philippines; or
(x) Such goods cannot be marked after importation except at an expense which is economically prohibitive, and the failure to mark the goods before importation was not due to any purpose of the importer, producer, seller or shipper to avoid compliance with this section.
75.
Deletemirandacharmenmae@gmail.com
ReplyDeleteAnswer to number 14:
Sec. 710 of Republic Act No. of 10863 provides that all goods of foreign origin imported into the Philippines or their containers shall be conspicuously marked in any official language of the Philippines as legibly, indelibly and permanently as the nature of the goods or container will permit and in such manner as to indicate to an ultimate purchaser in the Philippines the name of the country of origin of the goods.
The exception in the above-mentioned requirements of marking is provided in paragraph 3 hereof, if:
(i) Such goods are incapable of being marked;
(ii) Such goods cannot be marked prior to shipment to the Philippines without injury;
(iii) Such goods cannot be marked prior to shipment to the Philippines, except at an expense economically prohibitive of their importation;
(iv) The marking of a container of such goods will reasonably indicate the origin of such goods;
(v) Such goods are crude substances;
(vi) Such goods are imported for use by the importer and not intended for sale in their imported or any other form;
(vii) Such goods are to be processed in the Philippines by the importer or for the importer's account other than for the purpose of concealing the origin of such goods and in such manner that any mark contemplated by this section would necessarily be obliterated, destroyed, or permanently concealed;
(viii) An ultimate purchaser, by reason of the character of such goods or by reason of the circumstances of their importation, must necessarily know the country of origin of such goods even though they are not marked to indicate their origin;
(ix) Such goods were produced more than twenty (20) years prior to their importation into the Philippines; or
(x) Such goods cannot be marked after importation except at an expense which is economically prohibitive, and the failure to mark the goods before importation was not due to any purpose of the importer, producer, seller or shipper to avoid compliance with this section.
Hi Sir. This is my answer for number 16 question:
ReplyDeleteThe goods subject to general safeguard duties are goods or products imported in increased quantities.
The goods subject to special safeguard duties are goods with volume of imports that exceed a base trigger level or price falls below a trigger price level.
Reference: Republic Act 8800: An Act Protecting Local
Industries by Providing Safeguard Measures to be Undertaken in Response to Increased
Imports and Providing Penalties for Violations Thereof
A general safeguard measure is applied by the Secretary of Trade and Industry (for non-agricultural products) or the Secretary of Agriculture (for agricultural products) upon
positive final determination of the Tariff Commission that a product is being imported into the country in increased quantities, whether absolute or relative to domestic production, as to cause or threaten to cause serious injury to the domestic industry. In the case of non-agricultural products, however, the Secretary of Trade and Industry shall first establish that the application of such safeguard measures will be in the public interest.
Upon positive determination, the Tariff Commission shall recommend to the concerned Secretary an appropriate definitive measure.
The general safeguard measure shall be limited to the extent of redressing or preventing the injury and to facilitate adjustments by the domestic industry from the adverse effects directly attributed to the increased imports. A general safeguard measure shall not be applied to a product originating from a developing country, if that country’s share of total imports of the product is less than
three percent (3%), provided that developing countries with less than three percent (3%) share collectively account for not more than nine percent (9%) of total imports.
An additional special safeguard duty is imposed on an agricultural product, consistent with Philippine international treaty obligations, whenever the cumulative import volume in a given year exceeds its trigger volume and when the actual c.i.f. (Cost, Insurance and Freight) import price falls below its trigger price. The special safeguard duty is imposed by the Commissioner of Customs, through the Secretary of Finance, upon request by the Secretary of Agriculture.
The said special safeguard measure shall not be resorted to when the volume of the imported agricultural product under consideration is declining.
91.
DeleteWhat are the roles of Tariff Commission, DTI, DA, DOF, and Bureau of Customs in implementing safeguard measures?
Answer:
DeleteThe Tariff Commission conducts formal investigation and submission of report of findings, including recommendation on the appropriate definitive safeguard measure in cases of positive determination, to the Secretary of Agriculture (for agricultural goods) or Secretary of Trade and Industry (for industrial products). It is also the Commission’s task to create or designate a special unit within its agency that will undertake the functions relative of the imposition of safeguard measures.
The Department of Trade and Industry (DTI) is the lead agency in the determination of the imposition of safeguard measures to non-agricultural products or industrial products. It also initiates preliminary determination in case of protest. It evaluates the accuracy and adequacy of evidence presented to justify initiation of investigation. In a preliminary determination under critical circumstances, the Secretary of the DTI shall establish that the substantial increase in the volume of imports would warrant the imposition of a provisional relief to prevent further injury to the domestic industry that would be difficult to repair. It is also the DTI’s task to create or designate a special unit within its agency that will undertake the functions relative of the imposition of safeguard measures.
The Department of Agriculture (DA) is the lead agency in the determination of the imposition of safeguard measures to agricultural products, as well as initiates preliminary investigation in case of protest. The Secretary of Agriculture shall issue a Department Order requesting the Commissioner of Customs through the Secretary of Finance to impose an additional special safeguard duty, on agricultural products. It is also the DA’s task to create or designate a special unit within its agency that will undertake the functions relative of the imposition of safeguard measures.
The Tariff Commission, the DTI, and the DA are authorized to collect fees, charges and safeguard duties that are deemed necessary. Fifty percent (50%) of the revenue collected by the DTI, the DA, the Commission, and the Bureau of Customs from such fees, charges, and safeguard duties shall be set aside in a Remedies Fund which shall be earmarked for the use of these agencies in the implementation of remedies, including the safeguard measures. The remaining fifty percent (50%) shall be deposited under a special account to be created in the National Treasury and shall be earmarked for competitiveness enhancement measures for the industries affected by the increased imports.
[Continuation...]
DeleteIt is the role of the Department of Finance to issue written order, upon the instruction of either the Secretary of the DTI or the Secretary of Agriculture, to the Bureau of Customs to impose safeguard duties on non-agricultural and agricultural products, respectively. The Secretary of Finance shall instruct the Commissioner of Customs to impose cash bond, as necessary. The Secretary of Finance shall, within three (3) calendar days from receipt of the copy of the Order of the Secretary of DTI or DA, direct the Commissioner of Customs to impose the definitive safeguard duty or require the importer to present the relevant import clearance or authority for the product concerned.
The Bureau of Customs, upon the instruction of the Secretary of Finance, shall impose the necessary cash bond in provisional safeguard measures. It shall be mandatory for the Commissioner of Customs to instruct the Collector of Customs within three (3) days from receipt of instructions from the Secretary of Finance, to require importers of the product under consideration to post the appropriate cash bond. All importation's which enter the Philippines after the date of the decision of the Secretary shall be covered by the bond. It shall also be mandatory for the Collector of Customs to immediately implement the instructions of the Customs Commissioner upon receipt thereof.
In the event of a negative final determination, or if the cash bond is in excess of the definitive safeguard duly assessed, the Secretary shall immediately issue, through the Secretary of Finance, a written instruction to the Commissioner of Customs, authorizing the return of the cash bond or the remainder thereof as the case may be.
In addition, the Commissioner of Customs shall be the one to collect the definitive safeguard duty or, in the case the definitive safeguard measure is in the form of a tariff rate-quota or quantitative restriction, to require the importer to present the relevant import clearance or authority for the product under consideration.
It shall be mandatory for the Commissioner of Customs to issue within three (3) calendar days from receipt of the Order of the Secretary of Finance, an instruction to the Collector of Customs to proceed with the final appraisement of the product under consideration. It shall also be mandatory for the Collector of Customs to immediately implement the instructions of the Customs Commissioner upon receipt thereof. On the first week of each month, the Commissioner of Customs shall submit to the Secretary, through the Secretary of Finance, a certified report on the disposition of the cash bond and the amount of the safeguard duty collected for the previous month.
References:
1. Republic Act 8800: An Act Protecting Local Industries by Providing Safeguard Measures to be Undertaken in Response to Increased Imports and Providing Penalties for Violations Thereof
2. Tariff Commission' Website
https://tariffcommission.gov.ph/mandate-of-tariff-commission
3. Department of Agriculture's Website
https://www.da.gov.ph/
4. Department of Trade and Industry's Website
https://www.dti.gov.ph/
5. Department of Finance's Website
https://www.dof.gov.ph/
6. Bureau of Customs' Website
https://client.customs.gov.ph/
7. IMPLEMENTING RULES AND REGULATIONS
GOVERNING THE IMPOSITION OF A SAFEGUARD MEASURE
UNDER REPUBLIC ACT 8800 -SAFEGUARD MEASURES ACT
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Remarks & Grade: Your answer is very long but it is also very readable so I'm giving you a grade of 99. :)
Thank you very much, Sir! ❤
DeleteAnti-dumping duty refers to a special duty imposed on the importation of a product into the Philippines at less than its normal value when destined for domestic consumption in the country of export or origin, it being the difference between the export price and the normal value of such product. Some goods that have been imposed with dumping duties are wheat flour[1] from Turkey, clear float glass[2] and bronze float glass[3] from China.
ReplyDeleteThere is currently an expiry review for the dumping duty on imports of wheat flour from Turkey. The imposition of dumping duty on clear float glass and bronze float glass were ordered last August 17, 2017 and is set to expire in 2022.
There may also be a plan to impose dumping duty on palm oil[4] from Indonesia and Malaysia. Palm imports from these countries have increased by 900% over the past 3 years while there is no increase in palm oil consumption in the country. Interestingly, in an attempt to appease the Philippine government, Indonesia lifted its anti-dumping duty on banana Philippine exports. [5]
[1]https://drive.google.com/file/d/1OoRdWQ5PU2PVInsgRO3Rr_wgu4NY8uj9/view
[2]https://business.inquirer.net/220022/dti-slaps-antidumping-duties-china-glass-imports
[3]http://customs.gov.ph/wp-content/uploads/2017/09/cmc-138-2017-Definitive-Anti-Dumping-Measure-against-Importation-of-Clear-Float-Glass-Bronze-Float-Glass-from-China-1.pdf
[4]https://www.reuters.com/article/us-philippines-palmoil-imports/philippines-malaysia-indonesia-to-form-group-to-tackle-palm-oil-dumping-idUSKCN1R914D
https://www.aseantoday.com/2019/04/a-spat-over-palm-oil-the-philippines-patience-with-malaysia-and-indonesia-wears-thin/
[5]https://www.aseantoday.com/2019/04/a-spat-over-palm-oil-the-philippines-patience-with-malaysia-and-indonesia-wears-thin/
96.
DeleteIt’s not clear which country you’re referring to as regards the destination of the products.
Very good research but you still need to learn how to properly make citations on your endnotes.
All the products I mentioned are imported to the Philippines, Sir. I will work on preparing proper endnotes. Thank you.
DeleteOne of the purposes of imposition of custom duties is economic stimulation. Custom duties discourage consumers to buy imported products and patronize locally-made goods, which can boost the country’s economy. Therefore, the collection of custom duties provides incentive to local businesses to manufacture products and replace imported goods with domestic products. Consequently, custom duties lessen the pressure from foreign competition and lessen as well trade deficit.
ReplyDeleteMoreover, the collection of custom duties increases the revenue collected by the government. This additional fund can be utilized to various activities to promote economic growth.
95.
DeleteThe following are the differences between FCA and FOB:
ReplyDeleteAs to seller’s obligation: In FCA, also known as Free Carrier, the seller is obliged to deliver the goods to the carrier or another person nominated by the buyer. On the other hand, in FOB or Free On-Board, the seller is obliged to deliver the goods on board the vessel nominated by the buyer.
As to manner of delivery: In FCA, the delivery may be done at the seller’s premises or another named place agreed by the parties, while in FOB, the delivery is made at the named port of shipment by the buyer.
As to transferring of risks from seller to buyer: In FCA, the risk is transferred when the buyer’s carrier receives the goods. On the other hand, in FOB, the risk is transferred when the goods have been delivered onto the ship.
References:
Customs.gov.ph,”Customs Clearance Procedures on Express Shipments,” available at http://customs.gov.ph/wp-content/uploads/2016/10/Express-Shipments.pdf
“Incoterms” available at https://www.tnt.com/express/tl_ph/site/how-to/understand-incoterms.html
Tamayo, Mark Anthony, ”Incoterms® 2020: What is it all about?” available at https://www.manilatimes.net/2020/01/16/business/columnists-business/incoterms-2020-what-is-it-all-about-2/674891/
90.
DeleteIf I’m a seller and I’m obliged to deliver the goods to Sulpicio Lines, is it FCA or FOB?
Arrastre is the operation of handling, receiving, and custody of the imported or exported merchandise or the baggage of the passengers in ports or wharves. Such operation is subject to arrastre charge, that is the amount levied from the owner, consignee, or agent of such imported or exported merchandise or baggage handled, received or placed in their custody by the passengers.
ReplyDelete-Gabriel M. Naparato
For preparations submitted through e-mail:
ReplyDelete*Mirafuentes - 81.
*Naparato - 92.
*Lumbis - 94. Ff question - how about the ports of Matnog, Bulan, Sorsogon, Pilar, Pasacao, Masbate, Pio Duran? How are they treated?
Yes. It is possible for all products as long as it is being exported in a fraudulent manner or manner contrary to law. All goods exported from the Philippines (including prohibited and restricted goods under Sec. 118-119 of R.A. No. 10863), as well as those that require special permits from the Philippine government to be exported that failed to comply with the requirements under Sec.500 of R.A. No. 10863 is considered smuggled goods.
ReplyDelete85.
DeleteFor follow up question;
ReplyDeleteExamples of Resticted goods are:
1. Dynamite, gunpowder, ammunitions and other explosives, firearms and weapons of war, or parts thereof;
2. Roulette wheels, gambling outfits, loaded dice, marked cards, machines, apparatus or mechanical devices used in gambling or the distribution of money, cigars, cigarettes or other goods when such distribution is dependent on chance, including jackpot and pinball machines or similar contrivances, or parts thereof;
3.Opium pipes or parts thereof, of whatever material; to name a few.
For prohibited importation:
1. Written or printed goods in any form containing any matter advocating or inciting treason, rebellion, insurrection, sedition against the government of the Philippines, or forcible resistance to any law of the Philippines, or written or printed goods containing any threat to take the life of, or inflict bodily harm upon any person in the Philippines;
2. Goods, instruments, drugs and substances designed, intended or adapted for producing unlawful abortion, or any printed matter which advertises, describes or gives direct or indirect information where, how or by whom unlawful abortion is committed;
3. Infringing goods as defined under the Intellectual Property Code and related laws.
Reference:
(Chapter 3, Section 119 Customs Modernization and Tariff Act):
https://www.trade.gov/knowledge-product/philippines-import-requirements-and-documentation
88.
DeletePhilippine Span Asia Carrier Corporation (PSACC), formerly Sulpicio Lines,is a shipping line in the Philippines. It provides inter-island cargo services throughout the major ports and cities in the Philippines. Hence, if the seller is obliged to deliver the goods in this shipping line, it is FCA. Because the goods are to be delivered in a carrier and not in a vessel at the named port of shipment.
ReplyDelete85.
DeleteFor the follow-up answers submitted through e-mail:
ReplyDelete*Lumbis - 95.
Questions to and Answers of Ms Lumbis...
ReplyDeleteOriginal Question --- what are the ports of entries in Bicol Region other than Legazpi?
Answer: Tabaco and Jose Panganiban. (condensed because the verbatim of her answer cannot be pasted here)
FF-up Question --- How about the ports of Matnog, Bulan, Sorsogon, Pilar, Pasacao, Masbate, Pio Duran? How are they treated?
Answer:
Ports of Matnog, Bulan, Sorsogon, Pilar, Pasacao, Masbate, Pio Duran are treated under the jurisdiction and supervision of Philippine
Ports Authority (PPA) not Bureau of Customs as per Philippine Ports Authority official website.
According to District Collector of Legazpi Alexander Go during my phone interview this morning, June 13, 2020, no foreign vessels dock on these abovementioned ports, meaning to say only domestic vessels which carry passengers, cargoes and others are allowed to dock on these ports in Bicol Region. He further added to be considered as sub ports under Bureau of Customs control and supervision aside from those sub ports in Tabaco City, Albay and Jose Panganiban in Camarines Norte, the port must be approved first by the Commissioner.
Grade --- 95.
Comment: A Port of Entry is defined as a domestic port open to *both* domestic and *international* trade. (Sec. 102 [hh]/CMTA)