The Bureau of Customs (BOC) has released procedures for the transport, documentation, and clearance of express shipments in all Philippine airports.
Customs Administrative Order (CAO) No. 05-2020, signed by Finance Secretary Carlos Dominguez III on December 11, 2019 and Customs Commissioner Rey Leonardo Guerrero on December 3, 2019, covers express shipments carried as cargo under a master air waybill (MAWB) consigned to air express cargo operators (AECOs).
CAO 05-2020 implements Section 439 (Express shipment) and other related provisions of the Customs Modernization and Tariff Act (CMTA). According to the book Understanding International Trade, Tariff and Customs by former BOC deputy commissioner Atty. Agaton Teodoro Uvero, Section 439 is a new provision that provides clearer guidance on the customs treatment of express shipments.
The order divides express shipments into four categories, each with its own clearance procedures:
- Correspondence and documents
- De miniminis shipments
- Low-value, dutiable and/or taxable express shipments (value of more than P10,000 but less than P50,000)
- High-value shipments (value of P50,000 and above)
CAO 05-2020 requires AECOs to secure BOC accreditation to handle air express shipments.
The AECO should electronically submit in advance the true and complete copy of the electronic inward foreign cargo manifest (e-IFCM) at least one hour before arrival of aircraft coming from Asia and at least four hours before arrival of aircraft coming from other continents.
On the other hand, the electronic consolidated inward foreign cargo manifest (e-CIFCM) should be submitted one hour after arrival of the aircraft if the e-IFCM was submitted within the prescribed period.
If the e-IFCM was submitted late, the e-CIFCM will be accepted without penalty provided it is submitted in the customs systems not exceeding 24 hours after the e-CIFCM is registered with the Office of the Deputy Collector for Operations. This same privilege will apply in case the e-IFCMs are not validated on time, such as due to system errors, CAO 05-2020 states.
Cargoes not listed in the IFCM must be covered by a supplemental manifest which will be submitted within six hours upon arrival of the aircraft.
Supplemental IFCM will be submitted in hard copies and electronic form within the prescribed period under CAO 05-2020. Otherwise, the shipments listed in the supplemental IFCM will be considered as unmanifested and subject to seizure proceedings.
Unmanifested goods will be subject to the penalties under the applicable customs order.
Four shipment categories
The first category of express shipments covers correspondence and documents, which are business, inter-office, or personal in character with no commercial value. Also included are diplomatic pouches with official seal subject to certain conditions under CAO 05-2020.
De minimis shipments–goods not imposed with duty or tax—fall under the second category. Before de minimis shipments arrive and to enable the processing of express shipments, the AECOs should submit to BOC a detailed e-CIFCM of all de minimis shipments with free on board (FOB) or free carrier (FCA) value of P10,000 or less.
Low-value, dutiable and/or taxable express shipments, or goods with FOB or FCA value of more than P10,000 but less than P50,000—are under the third category. These shipments are subject to the application of risk-based management techniques, and will be allowed advance processing under certain conditions provided in CAO 05-2020.
Lastly, high-value shipments are those with an FOB value of P50,000 and above. Each shipment will be declared individually through the Customs Cargo Clearance System and will be processed under Formal Entry.
Split consignments—or two or more low-value, non-document express consignments which appear on the CIFCM to have the same shipper and the same consignee and with aggregate value of P50,000 or more, or its foreign currency equivalent value at the date of arrival of shipment—will be treated as a single consignment and will require the filing of formal entry.
Importations not entitled for immediate release as express shipments include importations declared as “without commercial value,” “of no commercial value,” or with specific amount but qualified by the phrase “for customs purposes” or analogous phrases; goods subject to requirements or conditions imposed by regulatory agencies unless for personal use and within the limits allowed by regulations; and importations to be entered conditionally free, for warehousing, for transit and/or admission to a Free Zone.
Shipments not considered as express shipments are prohibited and/or restricted goods under Philippine laws, dangerous goods and/or hazardous substances; valuable goods such as jewelry, works of arts, and the likes; animals, fishes, and fowls (live or frozen); foodstuff and highly perishable articles; human remains or cadavers; and money.
Under CAO 05-2020, a customs office will be established in all international airports where AECOs have established offices or hubs. The district collector will ensure that the operations of AECOs are fully complemented with the required number of personnel, and overtime services “will be provided by the Bureau as the need arises.”
The AECOs, on the other hand, will pay BOC service fees for services rendered in accordance with Sections 1211 (Time of unloading cargo), 1300 (Customs dues, fees, and charges), and 1508 (Customs service fees) of the CMTA.
BOC will also develop a facility to enable the lodgement and clearance of goods declaration for express shipments. The bureau should also establish a simplified ICT-enabled system for the lodgement, whether pre-arrival or not, clearance and monitoring of all express shipments, including split consignments.
Processing of mis-sorted, misrouted shipments
Mis-sorted or misrouted shipments may be returned to the shipper without payment of duties, taxes, and other charges under the following circumstances: the air waybill (AWB) indicates that the consignee’s address is other than the Philippines; the AWB indicates that the consignee’s address is the Philippines but the labels or markings clearly show that the destination shipment is other than the Philippines and BOC has verified the same; BOC is notified before the shipment arrives and the goods declaration lodged that the shipment is mis-sorted or misrouted; and the shipment is not subject to an alert order or derogatory information and is not regulated, restricted, or prohibited upon conduct of non-intrusive inspection.
The AECO should re-export mis-sorted or misrouted shipments within 24 hours from their arrival, and will be required to provide a designated and secured area for mis-sorted or misrouted shipments.
In case of low-value, dutiable and/or taxable express shipments, the AECO should deposit and maintain in the authorized accredited bank not less than P5 million specifically to guarantee immediate payment by the bank upon demand by BOC. In case the AECO defaults in paying the assessed customs duties, taxes, and other charges due on shipments that were released under CAO 05-2020, BOC will deduct these from the security deposit.
Expedited clearance and release procedures may be discontinued if an AECO violates or fails to comply with any of the provisions of CAO 05-2020.
In case of failure to supply advance and requisite manifests, the party failing to submit the required information within the periods prescribed will be subject to the payment of the imposable fines under the CAO on vessel and aircraft supervision and control system.
Moreover, a customs employee who violates any of the provisions of CAO 05-2020 will be held administratively liable, in addition to penal sanctions that may be imposed. – Roumina Pablo