Customs Modernization and Tariff Act

Case Overview and Summary

Summary of Republic Act No. 10863 (Customs Modernization and Tariff Act)

Preliminary Provisions
- Declares policy to protect revenue, facilitate trade, prevent smuggling, and modernize customs (Sec. 101)
- Defines key terms used in the law (Sec. 102)
- Outlines when importation begins and ends, and when duty is due (Secs. 103-104)
- Provides for effective date of import duty rates (Sec. 105)
- Defines declarant and their rights and responsibilities (Secs. 106-108)

Bureau of Customs
- Outlines powers and functions of the Commissioner and the Bureau (Secs. 200-205)
- Establishes customs districts, ports of entry, and duties of District Collectors (Secs. 206-213)
- Grants police authority to customs officers for enforcement (Secs. 214-224)

Customs Jurisdiction and Control
- Defines customs jurisdiction over Philippine territory (Sec. 300)
- Provides for customs control over goods and premises (Secs. 301-307)
- Allows temporary storage of goods (Sec. 307)

Import Clearance and Formalities
- Requires goods to be imported through customs offices (Sec. 400)
- Outlines requirements for goods declaration, including provisional declarations (Secs. 401-418)
- Provides for examination of goods by customs officers (Secs. 419-422)
- Covers assessment, release, and time limits for imported goods (Secs. 423-436)
- Allows special procedures for traveler baggage, mail, express shipments, and advance clearance (Secs. 437-440)

Export Clearance and Formalities
- Requires export declaration and conformity to standards (Secs. 500-503)
- Outlines lodgement and processing of export declarations (Sec. 502)

Customs Transit and Transshipment
- Allows customs transit within customs territory (Secs. 600-602)
- Provides for customs transshipment (Secs. 603-604)

Import Duty and Tax
- Outlines basis of customs valuation using sequential methods (Secs. 700-708)
- Allows government's compulsory acquisition of undervalued goods (Sec. 709)
- Requires marking of imported goods and containers (Sec. 710)
- Covers dumping duty, safeguard duty, and countervailing duty (Secs. 711-713)
- Allows recourse against discrimination by foreign countries (Sec. 714)

Tax and Duty Deferment, Preference and Exemption
- Lists conditionally tax and duty-exempt importations (Sec. 800)
- Establishes customs warehouses and their operations (Secs. 801-813)
- Covers free zones and movement of goods to/from them (Secs. 814-817)
- Provides for duty-free stores and exemptions (Secs. 818-821)

Duty Drawback and Refund
- Allows duty drawback on fuel, oils, and goods made from imported materials (Sec. 900)
- Outlines payment and prescription of drawback claims (Secs. 901-902)
- Covers refund of duties and taxes, and abatement (Secs. 903-913)

Post Clearance Audit
- Authorizes audit of records related to goods declaration (Sec. 1000)
- Outlines scope and criteria for audits (Sec. 1001)
- Grants access to records and power to obtain information (Secs. 1002-1004)
- Penalizes failure to pay correct duties after audit (Sec. 1005)
- Requires record-keeping by Bureau and importers (Secs. 1003, 1006)

Administrative and Judicial Procedures
- Allows advance rulings on classification, valuation, and origin (Secs. 1100-1103)
- Provides for administrative appeals and judicial review (Secs. 1104-1110)
- Covers alert orders for inspection of goods (Sec. 1111-1112)
- Outlines seizure, forfeiture, and disposition of goods (Secs. 1113-1151)
- Allows settlement of cases by fine or redemption (Sec. 1124)
- Establishes procedures for appeals and automatic review (Secs. 1126-1128)

Third Parties
- Allows supervision and regulation of customs service providers (Sec. 1200)
- Imposes obligations on carriers, vessels and aircraft (Secs. 1201-1225)
- Provides for supervision of other third parties (Sec. 1226)
- Establishes treatment of Authorized Economic Operators (Secs. 1227-1228)

Customs Fees and Charges (Secs. 1300-1301)

Offenses and Penalties
- Defines crimes related to unlawful importation, smuggling, misdeclaration, and other fraudulent practices (Secs. 1400-1430)
- Penalizes statutory offenses by customs officers (Secs. 1431-1433)

Miscellaneous Provisions
- Covers information, decisions, rulings, and related procedures (Secs. 1500-1509)
- Prohibits customs employees from having interests in imports/exports (Sec. 1511)
- Allows rewards for informers on smuggling (Sec. 1512)
- Permits outsourcing of non-sovereign functions (Sec. 1513)
- Allows adoption of international standards and best practices (Sec. 1514)

Tariff Administration and Policy
- Establishes the Tariff Commission and its functions (Secs. 1600-1607)
- Provides for flexible tariff clause and presidential powers (Sec. 1608)
- Allows promotion of foreign trade through agreements (Sec. 1609)
- Sets general rules for tariff interpretation (Sec. 1610)
- Outlines tariff nomenclature and import/export duty rates (Secs. 1611-1612)

Congressional Oversight Committee (Sec. 1700)

Final Provisions
- Authorizes implementing rules and regulations (Sec. 1800)
- Includes transitory, saving, repealing, and separability clauses (Secs. 1801-1804)
- Sets effectivity date (Sec. 1805)