The Philippine Bureau of Customs (BOC) has issued guidelines on the movement, transfer and clearance of transshipment goods effective early November.
Customs Administrative Order (CAO) No. 12-2019, signed by Finance Secretary Carlos Dominguez III on August 27 and by Customs commissioner Rey Leonardo Guerrero on August 13, covers all foreign goods for transshipment, except foreign goods for co-loading under Section 4 of Republic Act (RA) No. 10668 (Foreign Ships Co-loading Act) and its implementing rules and regulations. The CAO also excludes foreign goods for shifting, temporarily unloaded due to emergency or necessity and to be reloaded on board the same carrier and voyage or flight.
CAO 12-2019 takes effect on November 8, 30 days after its publication on October 9.
Transshipment refers to the customs procedure of transferring goods that are under customs control from the importing mode of transport to the exporting mode of transport within the area of one customs office–which is the office of both imports and exports.
Previously, under the Tariff and Customs Code of the Philippines, transshipment also referred to the transfer of goods from one Customs office to another. The Customs Modernization and Tariff Act (CMTA) has now differentiated the transfer and transshipment concepts, with transfer now specifically referred to as customs transit.
Goods for transshipment are not subject to payment of duties and taxes, provided the transshipment goods declaration indicates the nature of goods, supported by commercial or transport documents or evidence as required by BOC, according to CAO 12-2019.
Loading period and extension
Goods for transshipment must be loaded onto the exporting mode of transport within 30 calendar days from date of arrival. Exportation begins once the transshipment goods are loaded on board the exporting carrier.
BOC will allow an extension only for valid causes such as force majeure; act of public enemy in war, whether international or civil; if the container is damaged or leaked; legal order or act of competent public authority; and other causes beyond the control of the shipper or agent or other analogous situation.
The transshipment goods must also be loaded on board the exporting carrier within a reasonable period when the causes for the extension have ceased to exist.
The importing carrier or shipping agent will have to secure from the district collector, through the deputy collector for operations, a special permit to load for transshipment goods, specifying the goods to be transshipped.
If the transshipment goods are not loaded within the allowed period, they will be treated by BOC as regular importation, thus subject to payment of customs duties and taxes. If the owner or interested party, after due notice, fails to file the goods declaration for the shipment within the prescribed period under Section 407 of the CMTA, the goods will be subject for abandonment.
When transferring the transshipment goods from the carrier to the designated customs facilities and warehouse (CFW) or vice versa, they must be accompanied by a transfer note or any document or system to be adopted or utilized by BOC for this purpose.
Handling and moving of transshipment goods from the carrier to and within the CFW will be under continuous supervision and subject to BOC-issued rules and regulations, including safeguard measures to ensure the transshipments goods are not diverted to the domestic market.
BOC will collect a supervision fee for the transshipment goods of P1,000 per 20-footer if the port of entry is Port of Manila or Manila International Container Port, or P100 for other ports of entry. For goods to be transshipped via air, a service fee of P1 per kilogram will be paid by the freight forwarders or authorized agent.
Prohibited goods, such as hazardous and nuclear wastes, weapons of mass destruction, nationally controlled goods without the requisite prior authorization from the appropriate regulatory agency, if applicable, and other goods subject to prohibitory laws or international conventions where the Philippines is a signatory (e.g. Basel Convention, Convention on International Trade of Endangered Species of Wild Fauna and Flora), should not be discharged from the carrier even for transshipment purposes.
If such prohibited goods are discharged at the port, they will be seized by BOC and proceeded against in accordance with CAO 12-2019 and other existing rules without prejudice to the filing of appropriate prosecution charges against the persons liable for administrative or criminal offenses.
Hazardous and radioactive waste and other toxic substances covered by the Basel Convention and RA 6969 (Toxic Substances and Hazardous and Nuclear Wastes Control Act of 1990) and unloaded at the ports will be immediately returned to the country of origin, while the transporting vessel that unloaded such substances will be seized by BOC and proceeded against in accordance with the CMTA.
Goods with derogratory information
Transshipment goods with derogatory information will be subjected to non-intrusive inspection or physical examination for verification, in the presence of a representative from the carrier or concerned regulatory agency, if applicable.
Penalties to be imposed on the owner, operator, or agent of the carrier for unloading of goods for transshipment before arrival at port of entry without authority from Customs are P500,000 for the first offense, P1 million for the second offense, and P2 million for the third.
Penalties for unloading of goods for transshipment at the improper time and place after arrival are P100,000 for the first offense, P200,000 for the second, and P300,000 for the third.
Failure to supply the advance and requisite manifest, except for causes beyond the control of the owner, operator, or agent of the carrier, will come with a fine of P100,000 for the first offense, P200,000 for the second offense, and P300,000 for the third offense. Failure to present the requisite manifest to BOC during boarding formalities will also make the owner, operator, or agent of the vessel or aircraft liable for the same fines.
When any package or goods for transshipment included in the manifest and meant to be unloaded upon arrival of the carrier are not unloaded or are missing or have disappeared, their agent shall be liable for fines unless the disappearance of the package or the goods in question is not due to the negligence of the master of the vessel or pilot-in-command of an aircraft and is explained to the satisfaction of the district collector. Fines are P100,000 for the first offense, P200,000 for the second, and P300,000 for the third.
The owner, operator, or agent of the carrier will likewise be liable for the same fines when a package or goods listed in the manifest do not tally materially in character or with the description in the manifest.
When the master of a vessel or a pilot-in-command of the aircraft makes a false statement about the final destination of the transshipment goods loaded on board their carrier, the owner and operator will be liable for fines of P100,000 for the first offense, P200,000 for the second, and P300,000 for the third.
In case of failure to load within the period allowed, the importing means of transport will be liable for penalties of P500 per 20-footer for sea goods, and P1,000 per kg for air goods.
Anyone who violates CAO 12-2019, or its corresponding customs memorandum order for delinquency not specified in the CAO, will be fined P100,000 for the first offense, P200,000 for the second, and P300,000 for the third. – Roumina Pablo
