SEC. 118. Prohibited Importation and Exportation.

– The importation
and exportation of the following goods are prohibited:
(a) 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 up on any person in the Philippines;
(b) 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;
(c) Written or printed goods, negatives or cinematographic films,
photographs, engravings, lithographs, objects, paintings, drawings or other
representation of an obscene or immoral character;
(d) Any goods manufactured in whole or in part of gold, silver or other
precious metals or alloys and the stamp, brand or mark does not indicate
the actual fineness of quality of the metals or alloys;
(e) Any adulterated or misbranded food or goods for human consumption or
any adulterated or misbranded drug in violation of relevant laws and
regulations;
(f) Infringing goods as defined under the Intellectual Property Code and
related laws; and
(g) All otter goods or parts thereof which importation and exportation are
explicitly prohibited by law or rules and regulations issued by the competent
authority.
SEC. 119. Restricted Importation and Exportation. – Except when
authorized by law or regulation, the importation and exportation of the
following restricted goods are prohibited:
(a) Dynamite, gunpowder, ammunitions and other explosives, firearms and
weapons of war, or parts thereof;
(b) 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;
(c) Lottery and sweepstakes tickets, except advertisements thereof and lists
of drawings therein;
(d) Marijuana, opium, poppies, coca leaves, heroin or other narcotics or
synthetic drugs which are or may hereafter be declared habit forming by the
President of the Philippines, or any compound, manufactured salt,
derivative, or preparation thereof, except when imported by the government
of the Philippines or any person duly authorized by the Dangerous Drugs
Board, for medicinal purposes;
(e) Opium pipes or parts thereof, of whatever material; and (f) Any other
goods whose importation and exportation are restricted. The restriction to
import or export the above stated goods shall include the restriction on their
transit.

CONDITIONALLY TAX AND/OR DUTY-EXEMPT IMPORTATION

SEC. 800. Conditionally Tax and/or Duty-Exempt Importation. – The

following goods shall be exempt from the payment of import duties upon
compliance with the formalities prescribed in the regulations which shall be
promulgated by the Commissioner with the approval of the Secretary of
Finance: Provided, That goods sold, bartered, hired or used for purposes
other than what they were intended for and without prior payment of the
duty, tax or other charges which would have been due and payable at the
time of entry if the goods had been entered without the benefit of this
section, shall be subject to forfeiture and the importation shall constitute a
fraudulent practice against customs laws: Provided, however, That a sale
pursuant to a judicial order or in liquidation of the estate of a deceased
person shall not be subject to the preceding proviso, without prejudice to the
payment of duties, taxes and other charges: Provided, further, That the
President may, upon the recommendation of the Secretary of Finance,
suspend, disallow or completely withdraw, in whole or in part, any
conditionally free importation under this section:

(a) Aquatic products such as fishes, crustaceans, mollusks, marine animals,

seaweeds, fish oil, roe, caught or gathered by fishing vessels of Philippine
registry: Provided, That they are imported in such vessels or in crafts
attached thereto: Provided, however, That they have not been landed in any
foreign territory or, if so landed, that they have been landed solely for
transshipment without having been advanced in condition;

(b) Equipment for use in the salvage of vessels or aircrafts, not available
locally, upon identification and the giving of a security in an amount equal to
one hundred percent (100%) of the ascertained duties, taxes and other
charges thereon, conditioned for the exportation thereof or payment of
corresponding duties, taxes and other charges within six (6) months from
the date of acceptance of the goods declaration: Provided, That the Bureau
may extend the time for exportation or payment of duties, taxes and other
charges for a term not exceeding sis (6) months from the expiration of the
original period;

(c) Cost of repairs, excluding the value of the goods used, made in foreign
countries upon vessels or aircraft documented, registered or licensed in the
Philippines, upon proof satisfactory to the Bureau: (1) that adequate
facilities for such repairs are not afforded in the Philippines; or (2) that such
vessels or aircrafts, while in the regular course of their voyage or flight, were
compelled by stress of weather or other casualty to put into a foreign port to
make such repairs in order to secure the safety, seaworthiness, or
airworthiness of the vessels or aircrafts to enable them to reach their port of
destination;

(d) Goods brought into the Philippines for repair, processing or

reconditioning to be reexported upon completion of the repair, processing or
reconditioning: Provided, That the Bureau shall require security equal to one
hundred percent (100%) of the duties, taxes and other charges thereon,
conditioned for the exportation thereof or payment of the corresponding
duties, taxes and other charges within six (6) months from the date of
acceptance of the goods declaration;

(e) Medals, badges, cups, and other small goods bestowed as trophies or
prizes, or those received or accepted as honorary distinction;

(f) Personal and household effects belonging to returning residents including

household appliances, jewelry, precious stones, and other goods of luxury
which were formally declared and listed before departure and identified
under oath before the District Collector when exported from the Philippines
by such returning residents upon their departure therefrom or during their
stay abroad; personal and household effects including wearing apparel,
goods of personal adornment, toilet goods, instruments related to one's
profession and analogous personal or household effects, excluding luxury
items, vehicles, watercrafts, aircrafts and animals purchased in foreign
countries by residents of the Philippines which were necessary, appropriate,
and normally used for their comfort and convenience during their stay
abroad, accompanying them on their return, or arriving within a reasonable
time which, barring unforeseen and fortuitous events, in no case shall
exceed sixty (60) days after the owner's return.
For purposes of this section, the phrase "returning residents" shall refer to
nationals who have stayed in a foreign country for a period of at least sis (6)
months. Returning residents shall have tax and duty exemption on personal
and household effects: Provided, That:

(1) It shall not be in commercial quantities;

(2) It is not intended for barter, sale or for hire; and
(3) Limited to the FCA or FOB value of:

(i) Three hundred fifty thousand pesos (P350,000.00) for those who
have stayed in a foreign country for at least ten (10) years and
have not availed of this privilege within ten (10) years prior to
returning resident's arrival;

(ii) Two hundred fifty thousand pesos (P250,000.00) for those who
have stayed in a foreign country for a period of at least five (5)
but not more than ten (10) years and have not availed of this
privilege within five (5) years prior to returning resident's
arrival; or

(iii) One hundred fifty thousand pesos (P150,000.00) for those who
have stayed in a foreign country for a period of less than five (5)
years and have not availed of this privilege within six (6) months
prior to returning resident's arrival.

Any amount in excess of the above-stated threshold shall be

subject to the corresponding duties and taxes under this Act.

Every three (3) years after the effectivity of this Act, the
Secretary of Finance shall adjust the amount herein stated to its
present value using the CPI as published by the PSA.

In addition to the privileges granted under the immediately

preceding paragraph, returning Overseas Filipino Workers
(OFWs) shall have the privilege to bring in, tax and duty-free,
home appliances and other durables, limited to one of every kind
once in a given calendar year accompanying them on their
return, or arriving within a reasonable time which, barring
unforeseen and fortuitous events, in no case shall exceed sixty
(60) days after every returning OFW's return upon presentation
of their original passport at the port of entry: Provided, That any
amount in excess of FCA value of one hundred fifty thousand
pesos (P150,000.0,0) for personal and household effects or of
 the number of duty-free appliances as provided for under this
section, shall be subject to the corresponding taxes and duties:
Provided, further, That every three (3) years after the effectivity
of this Act, the Secretary of Finance shall adjust the amount
herein stated to its present value using the CPI as published by
the PSA;

(g) Residents of the Philippines, OFWs or other Filipinos while residing

abroad or upon their return to the Philippines shall be allowed to bring in or
send to their families or relatives in the Philippines balikbayan boxes which
shall be exempt from applicable duties and taxes imposed under the NIRC of
1997, as amended: Provided, That balikbayan boxes shall contain personal
and household effects only and shall neither be in commercial quantities nor
intended for barter, sale or for hire and that the FCA value of which shall not
exceed one hundred fifty thousand pesos (P150,000.00): Provided, further,
That every three (3) years after the effectivity of this Act, the Secretary of
Finance shall adjust the amount herein stated to its present value using the
CPI as published by the PSA: Provided, finally, That residents of the
Philippines, OFWs or other Filipinos can only avail of this privilege up to
three (3) times in a calendar year. Any amount in excess of the allowable
non-dutiable value shall be subject to the applicable duties and taxes;

(l) For purposes of this Act, OFWs refer to holders of valid passports duly
issued by the Department of Foreign Affairs (DFA) and certified by the
Department of Labor and Employment (DOLE) or the Philippine Overseas
Employment Administration (POEA) for overseas employment purposes.
They cover all Filipinos, working in a foreign country under employment
contracts, regardless of their professions, skills or employment status in a
foreign country; and (2) Calendar Year refers to the period from January 1
to December 31.

(h) Wearing apparel, goods of personal adornment, toilet goods, portable

tools and instruments, theatrical costumes and similar effects accompanying
travelers, or tourists, or arriving within a reasonable time before or after
their arrival in the Philippines, which, are necessary and appropriate for the
wear and use of such persons according to the nature of the journey, their
comfort and convenience: Provided, That this exemption shall not apply to
goods intended for other persons or for barter, sale or hire: Provided,
however, That the Bureau may require either a written commitment or a
security in an amount equal to one hundred percent (100%) of the
ascertained duties, taxes and other charges thereon, conditioned for the
exportation thereof or payment of the corresponding duties, taxes and other
charges within three (3) months from the date of acceptance of the goods
declaration: Provided, further, That the Bureau may extend the time for
exportation or payment of duties, taxes and other charges for a term not
exceeding three (3) months from the expiration of the original period.

Personal and household effects and vehicles belonging to foreign consultants

and experts hired by, or rendering service to, the government, and their
staff or personnel and families accompanying them or arriving within a
reasonable time before or after their arrival in the Philippines, in quantities
and of the kind necessary and suitable to the profession, rank or position of
the person importing said items, for their own use and not for barter, sale or
hire: Provided, That the Bureau may require either a written commitment or
a security in an amount equal to one hundred percent (100%) of the
ascertained duties, taxes and other charges thereon, upon the goods
classified under this subsection; conditioned for the exportation thereof or
payment of the corresponding duties, taxes and other charges within three
(3) months after the expiration of their term or contract: Provided, however,
That the Bureau may extend the time for exportation or payment of duties,
taxes and other charges for a term not exceeding three (3) months from the
expiration of the original period;

(i) Professional instruments and implements, tools of trade, occupation or

employment, wearing apparel, domestic animals, and personal and
household effects belonging to persons coming to settle in the Philippines or
Filipinos or their families and descendants who are now residents or citizens
of other countries, such parties hereinafter referred to as overseas Filipinos,
in quantities and of the class suitable to the profession, rank or position of
the persons importing said items, for their own use and not for barter or
sale, accompanying such persons, or arriving within a reasonable time:
Provided, That the Bureau may, upon the production of satisfactory evidence
that such persons are actually coming to settle in the Philippines and that
the goods are brought from their former place of abode, exempt such goods
from the payment of duties and taxes: Provided, further, That vehicles,
vessels, aircrafts, machineries and other similar goods for use in
manufacture, shall not fall within this classification and shall therefore be
subject to duties, taxes and other charges;

(j) Goods used exclusively for public entertainment, and for display in public
expositions, or for exhibition or competition for prizes, and devices for
projecting pictures and parts and appurtenances thereof, upon identification,
examination, and appraisal and the giving of a security in an amount equal
to one hundred percent (100%) of the ascertained duties, taxes and other
charges thereon, conditioned for exportation thereof or payment of the
corresponding duties, taxes and other charges within three (3) months from
the date of acceptance of the goods declaration: Provided, That the Bureau
may extend the time for exportation or payment of duties, taxes and other
charges for a term not exceeding three (3) months from the expiration of
the original period; and technical and scientific films when imported by
technical, cultural and scientific institutions, and not to be exhibited for
profit: Provided, further, That if any of the films is exhibited for profit, the
proceeds therefrom shall be subject to confiscation, in addition to the
penalty provide under this Act;

(k) Goods brought by foreign film producers directly and exclusively used for
mailing or recording motion picture films on location in the Philippines, upon
their identification, examination and appraisal and the giving of a security in
an amount equal to one hundred percent (100%) of the ascertained duties,
taxes and other charges thereon, conditioned for exportation thereof or
payment of the corresponding duties, taxes and other charges within three
(3) months from the date of acceptance of the goods declaration, unless
extended by the District Collector for another three (3) months;
photographic and cinematographic films, underdeveloped, exposed outside
the Philippines by resident Filipino citizens or by producing companies of
Philippine registry where the principal actors and artists employed for the
production are Filipinos, upon affidavit by the importer and identification that
such exposed films are the same films previously exported from the
Philippines, As used in this paragraph, the terms "actors" and "artists"
include the persons operating the photographic camera or other
photographic and sound recording apparatus by which the film is made;

(l) Importations for the official use of foreign embassies, legations and other
agencies of foreign governments: Provided, That those foreign countries
accord like privileges to corresponding agencies of the Philippines. Goods
imported for the personal or family use of members and attaches of foreign
embassies, legations, consular officers and other representatives of foreign
governments: Provided, however, That such privilege shall be accorded
under special agreements between, the Philippines and the countries which
they represent: Provided, further, That the privilege may be granted only
upon specific instructions of the Secretary of Finance pursuant to an official
request of the DFA on behalf of members or attaches of foreign embassies,
legations, consular officers and other representatives of foreign
governments.

(m) Imported goods donated to or, for the account of the Philippine
government or any duly registered relief organization, not operated for
profit, for free distribution among the needy, upon certification by the DSWD
or the Department of Education (DepED), or the Department of Health
(DOH), as the case may be;
(n) Containers, holders and other similar receptacles of any material
including kraft paper bags for locally manufactured cement for export,
including corrugated boxes for bananas, mangoes, pineapples and other
fresh fruits for export, except other containers made of paper, paperboard
and textile fabrics, which are of such character as to be readily identifiable
and/or reusable for shipment or transportation of goods shall be delivered to
the importer thereof upon identification, examination and appraisal and the
giving of a security in an amount equal to one hundred percent (100%) of
the ascertained duties, taxes and other charges thereon, within six (6)
months from the date of acceptance of the goods declaration;

(o) Supplies which are necessary for the reasonable requirements of the
vessel or aircraft in its voyage or flight outside the Philippines, including
goods transferred from a bonded warehouse in any Customs District to any
vessel or aircraft engaged in foreign trade, for use or consumption of the
passengers or its crew on board such vessel or aircraft as sea or air stores;
or goods purchased abroad for sale on board a vessel or aircraft as saloon
stores or air store supplies: Provided, That any surplus or excess of such
vessel or aircraft supplies arriving from foreign ports or airports shall be
dutiable;

(p) Goods and salvage from, vessels recovered after a period of two (2)
years from the date of filing the marine protest or the time when the vessel
was wrecked or abandoned, or parts of a foreign vessel or its equipment,
wrecked or abandoned in Philippine waters or elsewhere: Provided, That
goods and salvage recovered within the said period of two (2) years shall be
dutiable;

(q) Coffins or urns containing human remains, bones or ashes, used

personal and household effects (not merchandise) of the deceased person,
except vehicles, the FCA value of which does not exceed one hundred fifty
thousand pesos (P15 0,000.00), upon identification as such: Provided, That
every three (3) years after the effectivity of this Act, the value herein stated
shall be adjusted to its present value using the CPI as published by the PSA;

(r) Samples of the kind, in such quantity and of such dimension or

construction as to render them unsaleable or of no commercial value;
models not adapted for practical use; and samples of medicines, properly
marked "sample-sale punishable by law", for the purpose of introducing new
goods in the Philippine market and imported only once in a quantity
sufficient for such purpose by a person duly registered and identified to be
engaged in that trade: Provided, That importations under this subsection
shall be previously authorized by the Secretary of Finance: Provided,
however, That importation of sample medicines shall have been previously
authorized by the Secretary of Health, and that such samples are new
medicines not available in the Philippines; Provided, further, That samples
not previously authorized or properly marked in accordance with this section
shall be levied the corresponding tariff duty.

Commercial samples, except those that are not readily and easily identifiable
as in the case of precious and semi-precious stones, cut or uncut, and
jewelry set with precious or semi-precious stones, the value of any single
importation of which does not exceed FCA value of fifty thousand pesos
(P50.000.00) upon the giving of a security in an amount equal to the
ascertained duties, taxes and other charges thereon, conditioned for the
exportation of said samples within three (3) months from the date of the
acceptance of the goods declaration or in default thereof, the payment of the
corresponding duties, taxes and other charges: Provided, That if the FCA
value of any single consignment of such commercial samples exceeds fifty
thousand pesos (P50,000.00), the importer thereof may select any portion
of the same not exceeding the FCA value of fifty thousand pesos
(P50.000.00) for entry under the provision of this subsection, and the excess
of the consignment may be entered in bond, or for consumption, as the
importer may elect: Provided, further. That every three (3) years after the
effectivity of this Act, the Secretary of Finance shall adjust the amount
herein stated to its present value using the CPI as published by the PSA.

(s) Animals, except race horses, and plants for scientific, experimental
propagation or breeding, and for other botanical, zoological and national
defense purposes: Provided, That no live trees, shoots, plants, moss and
bulbs, tubers and seeds for propagation purposes may be imported under
this section, except by order of the government or other duly authorized
institutions: Provided, however, That the free entry of animals for breeding
purposes shall be restricted to animals of recognized breed, duly registered
in the record or registry established for that breed, and certified as such by
the Bureau of Animal Industry (BAI):

Provided, further, That the certification of such record, and pedigree of such
animal duly authenticated by the proper custodian of such record or registry,
shall be submitted to the District Collector, together with the affidavit of the
owner or importer that such animal is the animal described in said certificate
of record and pedigree: Provided, finally, That the animals and plants are
certified by the NEDA as necessary for economic development;

(t) Economic, technical, vocational, scientific, philosophical, historical and

cultural books or publications, and religious books like Bibles, missals,
prayer books, the Koran, Ahadith and other religious books of similar nature
and extracts therefrom, hymnal and hymns for religious uses: Provided, That
those which may have already been imported but are yet to be released by
the Bureau at the effectivity of this Act may still enjoy the privilege herein
provided upon certification by the DepED that such imported books and/or
publications are for economic, technical, vocational, scientific, philosophical,
historical or cultural purposes or that the same are educational, scientific or
cultural materials covered by the International Agreement on Importation of
Educational Scientific and Cultural Materials (IAESCM) signed by the
President of the Philippines on August 2,1952, or other agreements binding
upon the Philippines. Educational, scientific and cultural materials covered by
international agreements or commitments binding upon the Philippine
government so certified by the DepED.

(u) Philippine goods previously exported from the Philippines and returned
without having been advanced in value or improved in condition by any
process of manufacturing or other means, and upon which no drawback or
bounty has been allowed, including instruments and implements, tools of
trade, machinery and equipment, used abroad by Filipino citizens in the
pursuit of their business, occupation or profession; and foreign goods
previously imported when returned after having been exported and loaned
for use temporarily abroad solely for exhibition, testing and experimentation,
for scientific or educational purposes; and foreign containers previously
imported which have been used in packing exported Philippine goods and
returned empty if imported by or for the account of the person or institution
who exported them from the Philippines and not for sale, barter or hire
subject to identification: Provided, That Philippine goods falling under this
subsection upon which drawback or bounty have been, allowed shall, upon
reimportation thereof, be subject to a duty under this subsection equal to
the amount of such drawback or bounty;

(v) Aircraft, equipment and machinery, spare parts, commissary and

catering supplies, aviation gas, fuel and oil, whether crude or refined except
when directly or indirectly used for domestic operations, and such other
goods or supplies imported by and for the use of scheduled airlines operating
under congressional franchise: Provided, That such goods or supplies are not
locally available in reasonable quantity, qualify and price and are necessary
or incidental to the proper operation of the scheduled airline importing the
same;

(w) Machineries, equipment, tools for production, plans to convert mineral

ores into saleable form, spare parts, supplies, materials, accessories,
explosives, chemicals, and transportation and communications facilities
imported by and for the use of new mines and old mines which resume
operations, when certified to as such by the Secretary of the Department of
Environment and Natural Resources (DENR), upon the recommendation of
the Director of Mines and Geosciences Bureau, for a period ending five (5)
years from the first date of actual commercial production of saleable mineral
products: Provided, That such goods are not locally available in reasonable
quantity, quality and price and are necessary or incidental in the proper
operation of the mine; and aircrafts imported by agro-industrial companies
to be used by them in their agriculture and industrial operations or activities,
spare parts and accessories thereof, when certified to as such by the
Secretary of the Department of Agriculture (DA) or the Secretary of the
Department of Trade and Industry (DTI), as the case may be;

(x) Spare parts of vessels or aircraft of foreign registry engaged in foreign

trade when brought into the Philippines exclusively as replacements or for
the emergency repair thereof, upon proof satisfactory to the District
Collector that such spare parts shall be utilized to secure the safety,
seaworthiness or airworthiness of the vessel or aircraft, to enable it to
continue its voyage or flight;

(y) Goods exported from the Philippines for repair, processing or

reconditioning without having been substantially advanced in value, and
subsequently reimported in its original form and in the same state: Provided,
That in case the reimported goods advanced in value, whether or not in their
original state, the value added shall be subject to the applicable duty rate of
the tariff heading of the reimported goods; and

(z) Trailer chassis when imported by shipping companies for their exclusive
use in handling containerized cargo, upon posting a security in an amount
equal to one hundred percent (100%) of the ascertained duties, taxes and
other charges due thereon, to cover a period of one (1) year from the date
of acceptance of the entry, which period, for meritorious reasons, may be
extended by the Commissioner from year to year, subject to the following
conditions:

(1) That they shall be properly identified and registered with the Land
Transportation Office (LTO);

(2) That they shall be subject to customs supervision fee to be fixed by the
District Collector and subject to the approval of the Commissioner;

(3) That they shall be deposited in the customs territory when not in use;
and

(4) That upon the expiration of the period prescribed above, duties and
taxes shall be paid unless otherwise reexported.
(aa) Any officer or employee of the DFA, including any attache, civil or
military or member of the staff assigned to a Philippine diplomatic mission
abroad by the Department or any similar officer or employee of other
departments assigned to any Philippine consular office abroad, or any AFP
military personnel accorded assimilated diplomatic rank or on duty abroad
who is returning from a regular assignment abroad, for reassignment to the
home office, or who dies, resigns, or is retired from the service, after the
approval of this Act, shall be exempt from the payment of all duties and
taxes on personal and household effects, including one (1) motor car which
must have been ordered or purchased prior to the receipt by the mission or
consulate of the order of recall, and which must be registered in the name of
the officer or employee: Provided, That this exemption shall apply only to
the value of the motor car and to the aggregate assessed value of the
personal and household effects, the latter not to exceed thirty percent
(30%) of the total amount received by the officer or employee in salary and
allowances during the latest assignment abroad, but not to exceed four (4)
years: Provided, however, That this exemption shall not be availed of more
than once every four (4) years: Provided, further, That the officer or
employee concerned must have served abroad for not less than two (2)
years.

The provisions of general and special laws, to the contrary notwithstanding,

including those granting franchises, there shall be no exemption whatsoever
from the payment of duties except as provided for in this Act; those granted
to government agencies, instrumentalities or government-owned or
-controlled corporations (GOCCs) with existing contracts, commitments,
agreements, or obligations with foreign countries requiring such exemption;
those granted to international institutions, associations or organizations
entitled to exemption pursuant to agreements or special laws; and those
that may be granted by the President upon prior recommendation of the
NEDA in the interest of national economic development.

BASIS OF VALUATION

SEC. 700. Sequential Application of Valuation Methods. – Imported goods

shall be valued in accordance with the provisions of Section 701 of this Act
whenever the conditions prescribed therein are fulfilled.

Where the customs value cannot be determined under the provisions of

Section 701 of this Act, it is to be determined by proceeding sequentially
through the succeeding sections hereof to the first such section under which
the customs value can be determined. Except as provided in Section 704 of
this Act, it is only when the customs value cannot be determined under the
provisions of a particular section that the provisions of the next section in
the sequence can be used.

If the importer does not request that the order of Sections 704 and 705 of
this Act be reversed, the normal order of the sequence is to be followed. If
the importer so requests but it is impossible to determine the customs value
under Section 705 of this Act, the customs value shall be determined under
Section 704.

When the customs value cannot be determined under Sections 701 through
705, it may be determined under Section 706 of this Act.

SEC. 701, Transaction Value System – Method One. – The transaction value
shall be the price actually paid or payable for the goods when sold for export
to the Philippines adjusted in accordance with the provisions of tins section:
Provided, That:

(a) There are no restrictions as to the disposition or use of the goods by the
buyer other than restrictions which:

(i) Are imposed or required by law or by Philippine authorities;

(ii) Limit the geographical area in which the goods may be resold; or
(iii) Do not substantially affect the value of the goods;
(b) The sale or price is not subject to some condition or
consideration for which a value cannot be determined with
respect to the goods being valued; and
(c) The buyer and the seller are not related, or where the buyer
and the seller are related, that the transaction value is
acceptable for customs purposes under the provisions hereof.

For purposes of this Act, persons shall be deemed related only if:
(i) They are officers or directors of one another's business;
(ii) They are legally recognized partners in business;
(iii) There exists an employer-employee relationship between them;
(iv) Any person directly or indirectly owns, controls or holds five
percent (5%) or more of the outstanding voting stocks or shares
of both seller and buyer;
(v) One of them directly or indirectly controls the other;
(vi) Both of them are directly or indirectly controlled by a third
person;
(vii) Together they directly or indirectly control a third person; or
(viii) They are members of the same family, including those related by
affinity or consanguinity up to the fourth civil degree.
Persons who are associated in business with one another in that one is the
sole agent, sole distributor or sole concessionaire, however described, of the
other shall be deemed to be related for the purposes of this Act if they fall
within, any of the eight (8) cases cited in the preceding paragraph.

In a sale between related persons, the transaction value shall be accepted as

basis for customs valuation whenever the importer demonstrates that such
value closely approximates one of the following occurring at or about the
same time:

(a) The transaction value in sales to unrelated buyers of identical or similar

goods for export to the same country of importation;

(b) The customs value of identical or similar goods as determined under the
provisions of Section 704 of this Act; or

(c) The customs value of identical or similar goods are determined under the
provisions of Section 705 of this Act.

In determining the transaction value, the following shall be added to the

price actually paid or payable for the imported goods:

(1) To the extent that they are incurred by the buyer but are not included in
the price actually paid or payable for the imported goods:

(a) Commissions and brokerage fees except buying commissions;

(b) Cost of containers;
(c) Cost of packing, whether for labor or materials;
(d) Value, apportioned as appropriate, of the following goods and services:
materials, components, parts and similar items incorporated in the imported
goods; tools; dies; moulds and similar items used in the production of
imported goods; materials consumed in the production of the imported
goods; and engineering, development, artwork, design work and plans and
sketches undertaken elsewhere than in the Philippines and necessary for the
production of imported goods, where such goods and services are supplied
directly or indirectly by the buyer free of charge or at a reduced cost for use
in connection with the production and sale for export of the imported goods;
and
(e) Amount of royalties and license fees related to the goods being valued
that the buyer must pay either directly or indirectly, as a condition of sale of
the goods to the buyer.

(2) Value of any part of the proceeds of any subsequent resale, disposal or
use of the imported goods that accrues directly or indirectly to the seller;
(3) Cost of transport of the imported goods from the port of exportation to
the port of entry in the Philippines;

(4) Loading, unloading and handling charges associated with the transport of
the imported goods from, the country of exportation to the port of entry in
the Philippines; and

(5) Cost of insurance.

All additions to the price actually paid or payable shall be made only on the
basis of objective and quantifiable data.

SEC. 702. Transaction Value of Identical Goods – Method Two. – Where the
dutiable value cannot be determined under method one, the dutiable value
shall be the transaction value of identical goods sold for export to the
Philippines and exported at or about the same time as the goods being
valued. For purposes of this section, "Identical goods" refer to goods which
are the same in all respects, including physical characteristics, quality and
reputation. Minor differences in appearances shall not preclude goods
otherwise conforming to the definition from being regarded as identical.

If, in applying this section, more than one transaction value of identical
goods are found, the lowest value shall be used to determine the customs
value.

SEC. 703. Transaction Value of Similar Goods - Method Three. – Where the
dutiable value cannot be determined under the preceding method, the
dutiable value shall be the transaction value of similar goods sold for export
to the Philippines and exported at or about the same time as the goods
being valued. For purposes of this section, "Similar goods" refer to goods
which, although not alike in all respects, have like characteristics and similar
component materials which enable them to perform the same functions and
to be commercially interchangeable. The quality of the goods, its reputation
and the existence of a trademark shall be among the factors to be
considered in determining whether goods are similar.

If, in applying this section, more than one transaction value of identical
goods are found, the lowest such value shall be used to determine the
customs value.

SEC. 704. Deductive Value – Method Four. – Where the dutiable value
cannot be determined under the preceding method, the dutiable value shall
be the deductive value unless otherwise requested by the importer as
provided in Section 700 hereof. The deductive value which shall be based on
the unit price at which the imported goods or identical or similar imported
goods are sold in the Philippines, in the same condition as when imported, in
the greatest aggregate quantity, at or about the time of the importation of
the goods being valued, to persons not related to the persons from whom
they buy such goods, subject to deductions for the following:

(1) Either the commissions usually paid or agreed to be paid or the additions
usually made for profit and general expenses in connection with sales in
such country of imported goods of the same class or kind;

(2) The usual costs of transport and insurance and associated costs incurred
within the Philippines;

(3) Where appropriate, the costs of: (i) transport of the imported goods
from the port of exportation to the port of entry in the Philippines; (ii)
loading, unloading and handling charges associated with the transport of the
imported goods from the country of exportation to the port of entry in the
Philippines; and (iii) insurance; and

(4) The customs duties and other national taxes payable in the Philippines
by reason of the importation or sale of the goods.

If neither the imported goods nor identical nor similar imported goods are
sold at or about the time of importation of the goods being valued in the
Philippines in the conditions they were imported, the customs value shall,
subject to the conditions set forth in the preceding paragraph, be based on
the unit price at which the imported goods or identical or similar imported
goods sold in the Philippines in the condition they were imported and at the
earliest date after the importation of the goods being valued, but before the
expiration of ninety (90) days after such importation.

If neither the imported goods nor identical nor similar imported goods are
sold in the Philippines in the condition as imported, then, if the importer so
requests, the dutiable value shall be based on the unit price at which the
imported goods, after further processing, are sold in the greatest aggregate
quantity to persons in the Philippines who are not related to the persons
from whom they buy such goods, subject to allowance for the value added
by such processing and deductions provided under subsections (1), (2), (3)
and (4) hereof.

SEC. 705. Computed Value – Method Five. – Where the dutiable value
cannot be determined under the preceding method, the dutiable value shall
be the computed value of the sum of:
(1) The cost or the value of materials and fabrication or other processing
employed in producing the imported goods;

(2) The amount for profit and general expenses equal to that usually
reflected in the sale of goods of the same class or kind as the goods being
valued which are made by producers in the country of exportation for export
to the Philippines;

(3) The freight, insurance fees and other transportation expenses for the
importation of the goods;

(4) Any assist, if its value is not included under paragraph (1) hereof; and

(5) The cost of containers and packing, if their values are not included under
paragraph (1) hereof.

The Bureau shall not require or compel any person not residing in the
Philippines to produce for examination, or to allow access to, any account or
other record for the purpose of determining a computed value. However,
information supplied by the producer of the goods for the purposes of
determining the customs value may be verified in another country with the
agreement of the producer and provided that said producer will give
sufficient advance notice to the government of the country in question and
that the latter does not object to the investigation.

SEC. 706. Fallback Value–Method Six. – If the dutiable value cannot be

determined under the preceding methods described above, it shall be
determined by using other reasonable means and on the basis of data
available in the Philippines. If the importer so requests, the importer shall be
informed in writing of the dutiable value determined under method six and
the method used to determine such value.

No dutiable value shall be determined under method six on the basis of:
(1) The selling price in the Philippines of goods produced in the Philippines;

(2) A system that provides for the acceptance for customs purposes of the
higher of two (2) alternative values;

(3) The price of goods in the domestic market of the country of exportation;

(4) The cost of production, other than computed values, that have been
determined for identical or similar goods in accordance with method five
hereof;
(5) The price of goods for export to a country other than the Philippines;

(6) Minimum customs values; or

(7) Arbitrary or fictitious values.

SEC. 707. Ascertainment of the Accuracy of the Declared Value. – Nothing in

this section shall be construed as restricting or calling into question the right
of the Bureau to ascertain the truth or accuracy of any statement, document
or declaration presented for customs valuation purposes. When a declaration
has been presented and when the Bureau has reason to doubt the truth or
accuracy of the particulars or of documents produced in support of such
declaration, it may ask the importer to provide further explanation, including
documents or other evidence, that the declared value represents the total
amount actually paid or payable for the imported goods, adjusted in
accordance with the provisions of Section 701 of this Act.

If in the course of determining the dutiable value of imported goods, it

becomes necessary to delay the final determination of such dutiable value,
the importer shall nevertheless be able to secure the release of the imported
goods upon posting of a sufficient security in an amount equivalent to the
duties and taxes in dispute conditioned on the payment of additional duties
and taxes, if any, as may be determined: Provided, That prohibited goods
shall not be released under any circumstance.

If, after receiving further information, or in the absence of a response, the

Bureau still has reasonable doubts on the truth or accuracy of the declared
value, it may deem that the customs value of the imported goods cannot be
determined under method one, without prejudice to an importer's right to
appeal pursuant to Section 1104 of this Act. Before taking a final decision,
the District Collector shall communicate to the importer, in writing if
requested, the grounds for doubting the truth or accuracy o£ the particulars
or documents produced and give the importer a reasonable opportunity to
respond. When a final decision is made, the Bureau shall communicate its
decision, and the grounds therefor in writing.

SEC. 708. Exchange Rate. – For the assessment and collection of import
duty upon imported goods and for other purposes, the value and prices
thereof quoted in foreign currency shall be converted into the currency of
the Philippines at the current rate of exchange or value specified or
published, from time to time, by the Bangko Sentral ng Pilipinas (BSP).
 SPECIAL DUTIES AND TRADE REMEDY MEASURES

SEC. 709. Government's Right of Compulsory Acquisition. – In order to

protect government revenues against undervaluation of goods, the
Commissioner may, motu proprio or upon the recommendation of the
District Collector, acquire imported goods under question for a price equal to
their declared customs value plus any duties already paid on the goods,
payment for which shall be made within ten (10) working days from issuance
of a warrant signed by the Commissioner for the acquisition of such goods.

An importer who is dissatisfied with a decision of the Commissioner

pertaining to this section may, within twenty (20) working days after the
date on which notice of the decision is given, appeal to the Secretary of
Finance, and thereafter If still dissatisfied, to the CTA as provided for in
Section 1136 of this Act.

Where no appeal is made by the importer, or upon reaffirmation of the

Commissioner's decision during the appeals process, the Bureau or its
agents shall sell the acquired goods pursuant to existing laws and
regulations.

Nothing in this section limits or affects any other powers of the Bureau with
respect to the disposition of the goods or any liability of the importer or any
other person with respect to an offense committed in the importation of the
goods.

SEC. 710. Marking of Imported Goods and Containers. – (A) Marking of

Goods, – Except as hereinafter provided, all goods of foreign origin imported
into the Philippines or their containers, as provided in subsection (B) hereof
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. Pursuant thereto,
the Commissioner shall, with the approval of the Secretary of Finance:

(1) Determine the character of words and phrases or abbreviation thereof

which shall be acceptable as indicating the country of origin and prescribe
any reasonable method of marking, whether by printing, stenciling,
stamping, branding, labeling or by any other reasonable method, and in a
conspicuous place on the goods or container where the marking' shall
appear;
(2) Require the addition of other words or symbols which may be
appropriate to prevent deception or mistake as to the origin of the goods or
as to the origin of any other goods with which such imported goods is
usually combined subsequent to importation but before delivery to an
ultimate purchaser; and

(3) Authorize the exception of any goods from the requirements of marking
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.

(B) Marking of Containers. – Whenever goods are exempt under paragraph

(3) of subsection (A) of this section from the requirements of marking, the
immediate container, if any, of such goods, or such other container or
containers of such goods, shall be marked in such manner as to indicate to
an ultimate purchaser in the Philippines the name of the country of origin of
such goods in any official language of the Philippines, subject to all
provisions of this section, including the same exceptions as are applicable to
goods under paragraph (3) of subsection (A).

(C) Pine for Failure to Mark. – If, at the time of importation any good or its
container, as provided in subsection (B) hereof, is not marked in accordance
with the requirements of this section, there shall be levied, collected, and
paid upon such good a marking duty of five percent (5%) of dutiable value,
which shall be deemed to have accrued at the time of importation,

(D) Release Withheld Until Marked. – No imported goods held in customs

custody for inspection, examination, or assessment shall be released until
such goods or their containers shall have been marked in accordance with
the requirements of this section and until the amount of duty estimated to
be payable under subsection (C) of this section shall have been deposited.

(E) The failure or refusal of the owner or importer to mark the goods as
herein required within a period of thirty (30) days after due notice shall
constitute as an act of abandonment of said goods and their disposition shall
be governed by the provisions of this Act relative to abandonment of
imported goods.

SEC. 711. Dumping Duty. –

The provisions of Republic Act No. 8752, otherwise known as the "Anti-
Dumping Act of 1999", are hereby adopted.

SEC. 712. Safeguard Duty. – The provisions of Republic Act No. 8800,
otherwise known as the "Safeguard Measures Act", are hereby adopted.

SEC. 713. Countervailing Duty. – The provisions of Republic Act No. 8751,
otherwise known as "An Act Strengthening the Mechanisms for the
Imposition of Countervailing Duties on Imported Subsidized Products,
Commodities or Articles of Commerce in Order to Protect Domestic
Industries from Unfair Trade Competition, Amending for the Purpose Section
302, Part 2, Title II, Book I of Presidential Decree No. 1464", otherwise
known as the "Tariff and Customs Code of the Philippines, as Amended", are
hereby adopted.

SEC. 714. Discrimination by Foreign Countries. – Without prejudice to the

Philippine commitment in any ratified international agreements or treaty, the
following recourse shall be applicable in case of discrimination by foreign
countries:

(a) When the President finds that the public interest will be served thereby,
the President shall, by proclamation, specify and declare new or additional
duties in an amount not exceeding one hundred percent (100%) ad valorem
upon goods wholly or in part the growth or product of, or imported in a
vessel of any foreign country whenever the President shall find as a fact that
such country:

(1) Imposes, directly or indirectly, upon the disposition or transportation in

transit or through reexportation from such country of any goods wholly or in
part the growth or product of the Philippines, any unreasonable charge,
exaction, regulation or limitation which is not equally enforced upon the like
goods of every foreign country; or

(2) 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.

(b) If at any time the President shall find it to be a fact that any foreign
country has not only discriminated against the commerce of the Philippines,
as aforesaid, but has, after the issuance of a proclamation as authorized in
subsection (a) of this section, maintained or increased its said discrimination
against the commerce of the Philippines, the President is hereby authorized,
if deemed consistent with the interests of the Philippines and of public
interest, to issue a further proclamation directing that such product of said
country or such goods imported in their vessels be excluded from
importation into the Philippines.

(c) Any proclamation issued by the President under this section shall, if the
President deems it consistent with the interest of the Philippines, extend to
the whole of any foreign country or may be confined to any subdivision or
subdivisions thereof: Provided, That the President may, whenever the public
interest requires, suspend, revoke, supplement or amend any such
proclamation.
(d) All goods imported contrary to the provisions of this section shall be
forfeited to the government of the Philippines and shall be liable to be
seized, prosecuted and condemned in like manner and under the same
regulations, restrictions, and provisions as may from time to time be
established for the recovery, collection, distribution, and remission or
forfeiture to the government by the tariff and customs laws. Whenever the
provision of this section shall be applicable to importations into the
Philippines of goods wholly or in part the growth or product of any foreign
country, it shall be applicable thereto, whether such goods are imported
directly or indirectly.

(e) It shall be the duty of the Commission to ascertain and at all times be
informed whether any of the discriminations against the commerce of the
Philippines enumerated in subsections (a) and (b) of this section are
practiced by any country; and if and when such discriminatory acts are
disclosed, it shall be the duty of the Commission to bring the matter to the
attention of the President, and to recommend measures to address such
discriminatory acts. (f) The Secretary of Finance shall make such rules and
regulations as are necessary for the execution of a proclamation that the
President may issue in accordance with the provisions of this section.

SEC. 103. When Importation Begins and Deemed Terminated. –

Importation begins when the carrying vessel or aircraft enters the Philippine
territory with the intention to unload therein. Importation is deemed
terminated when:

(a) The duties, taxes and other charges due upon the goods have been
paid or secured to be paid, at the port of entry unless the goods are
free from duties, taxes and other charges and legal permit for
withdrawal has been granted: or

(b) In case the goods are deemed free of duties, taxes and other
charges, the goods have legally left the jurisdiction of the Bureau.

SEIZURE AND FORFEITURE

SEC. 1113. Property Subject to Seizure and Forfeiture. – Property that shall
be subject to seizure and forfeiture include:

(a) Any vehicle, vessel or aircraft, including cargo, which shall be used
unlawfully in the importation or exportation of goods or in conveying or
transporting smuggled goods in commercial quantities into or from any
Philippine port or place. The mere carrying or holding on board of smuggled
goods in commercial quantities shall subject such vehicle, vessel, aircraft, or
any other craft to forfeiture: Provided, That the vehicle, vessel, aircraft or
any other craft is not used as a common carrier which has been chartered or
leased for purposes of conveying or transporting persons or cargo;

(b) Any vessel engaging in the coastwise trade which shall have on board
goods of foreign growth, produce, or manufacture in excess of the amount
necessary for sea stores, without such goods having been properly entered
or legally imported;

(c) Any vessel or aircraft into which shall be transferred cargo unloaded
contrary to law prior to the arrival of the importing vessel or aircraft at the
port of destination;

(d) Any part of the cargo, stores, or supplies of a vessel or aircraft arriving
from a foreign port which is unloaded before arrival at the vessel's or
aircraft's port of destination and without authority from the customs officer;
but such cargo, ship, or aircraft stores and supplies shall not be forfeited if
such unloading was due to accident, stress of weather, or other necessity
and is subsequently approved by the District Collector;

(e) Goods which are fraudulently concealed in or removed contrary to law

from any public or private warehouse, container yard, or container freight
station under customs supervision;

(f) Goods, the importation or exportation of which are effected or attempted

contrary to law, or any goods of prohibited importation or exportation, and
all other goods which, in the opinion of the District Collector, have been
used, are or were entered to be used as instruments in the importation or
the exportation of the former;

(g) Unmanifested goods found on any vessel or aircraft if manifest therefor

is required;

(h) Sea stores or aircraft stores adjudged by the District Collector to be

excessive, when the duties and taxes assessed by the District Collector
thereon are not paid or secured forthwith upon assessment of the same;

(i) Any package of imported goods which is found upon examination to

contain goods not specified in the invoice or goods declaration including all
other packages purportedly containing imported goods similar to those
declared in the invoice or goods declaration to be the contents of the
misdeclared package;

(j) Boxes, cases, trunks, envelopes, and other containers of whatever

character used as receptacle or as device to conceal goods which are subject
to forfeiture under this Act or which are so designed as to conceal the
character of such goods;

(k) Any conveyance actually used for the transport of goods subject to
forfeiture under this Act, with its equipage or trappings, and any vehicle
similarly used, together with its equipment and appurtenances. The mere
conveyance of smuggled goods by such transport vehicle shall be sufficient
cause for the outright seizure and confiscation of such transport vehicle but
the forfeiture shall not be effected if it is established that the owner of the
means of conveyance used as aforesaid, is engaged as common carrier and
not chartered or leased, or that the agent in charge thereof at the time, has
no knowledge of the unlawful act; and

(1) Goods sought to be imported or exported:

(1) Without going through a customs office, whether the act was
consummated, frustrated, or attempted;

(2) Found in the baggage of a person arriving from abroad and undeclared
by such person;

(3) Through a false declaration or affidavit executed by the owner, importer,

exporter, or consignee concerning the importation of such, goods;

(4) On the strength of a false invoice or other document executed by the

owner, importer, exporter, or consignee concerning the importation or
exportation of such goods; or

(5) Through any other practice or device contrary to law by means of which
such goods entered through a customs office to the prejudice of the
government.

SEC. 1114. Properties not Subject to Forfeiture in, the Absence of Prima
Facie Evidence. – The forfeiture of the vehicle, vessel, or aircraft shall not be
effected if it is established that the owner thereof or the agent in charge of
the means of conveyance used as aforesaid has no knowledge of or
participation in the unlawful act: Provided, That a prima facie presumption
shall exist against the vehicle, vessel, or aircraft under any of the following
circumstances:
(a) If the conveyance has been used for smuggling before;

(b) If the owner is not in the business for which the conveyance is generally used;
and

(c) If the owner is not financially in a position to own such conveyance.

SEC. 1115. Conditions Affecting Forfeiture of Goods. – The forfeiture shall be

effected only when and while the goods are in the custody or within the jurisdiction
of customs officers, or in the possession or custody of or subject to the control of
the importer, exporter, original owner, consignee, agent of another person effecting
the importation, entry or exportation in question, or in the possession or custody of
or subject to the control of persons who shall receive, conceal, buy, sell, or
transport the same, or aid in any of such acts, with knowledge that the goods were
imported, or were the subject of an attempt at importation or exportation contrary
to law.

SEC. 1116. Seizure or Release of Goods. – The District Collector shall issue an order
of release or a warrant of seizure within five (5) days, or two (2) days in case of
perishable goods, upon the recommendation of the alerting officer or any other
customs officer. The District Collector shall immediately make a report of such
seizure or release to the Commissioner.

SBC. 1117. Warrant of Seizure or Order of Release. – The District Collector shall
have the authority to issue a warrant of seizure of the goods upon determination of
the existence of probable cause and in case of nonexistence thereof, the issuance of
order of release. In case the District Collector issued an order of release, the
District Collector shall immediately transmit all the records to the Commissioner
who shall automatically review within forty-eight (48) hours, or within twenty-four
(24) hours in case of perishable goods. When no decision is made by the
Commissioner within the prescribed period, the imported goods shall be deemed
released.

The lifting of the alert order shall be issued by the District Collector only upon the
affirmation of the decision of the District Collector by the Commissioner, or after
the lapse of the period of review by the Commissioner, whichever is earlier.

SEC. 1118. Sale of Perishable Goods During Forfeiture Proceedings. – Upon motion
of the importer of the perishable goods, the goods may be sold at a public auction
during the pendency of the forfeiture proceedings. The proceeds of the auction shall
be held in escrow until the final resolution of the proceedings.

SEC. 1119. Service of Warrant of Seizure. – The District Collector shall cause the
service of warrant of seizure to the owner or importer of the goods or the
authorized representative thereof. The owner or importer shall be given an
opportunity to be heard during the forfeiture proceedings.
For the purpose of serving the warrant, the importer, consignee, or person
holding the bill of lading or airway bill shall be deemed the "owner" of the
goods. For the same purpose, "authorized representative" shall include any
agent of the owner and if the owner or the agent is unknown, any person
having possession of the goods at the time of the seizure.
Service of warrant to an unknown owner shall be effected by posting the
warrant for fifteen (15) days in a public place at the concerned district, and
by electronic or printed publication.

SEC. 1120. Description, Classification and Valuation of Seized Goods. – The

District Collector shall cause the preparation of a list and particular
description, classification, and valuation of the goods seized and valuation of
identical or similar goods.

SEC. 1121. Proceedings in Case of Property Belonging to Unknown Parties. –

If, within fifteen (15) days after service of warrant, no owner or agent can
be found or appears before the District Collector, the seized goods shall be
forfeited ipso facto in favor of the government to be disposed of in
accordance with this Act.

SEC. 1122. Seizure of Vessel or Aircraft for Delinquency of Owner or Officer.

– When the owner, agent, master, pilot in command or other responsible
officer of any vessel or aircraft becomes liable for any violation of this Act,
the vessel or aircraft may be seized and be subjected to forfeiture
proceedings for the settlement of any fine or penalty for which such person
is liable. In determining whether or not to seize a vessel or aircraft, the
Bureau shall take into account the amount of fine or penalty in relation to
the commercial impact that may be caused to international trade by the
seizure or detention as well as the value of the vessel or aircraft.

SEC. 1123. Burden of Proof in Forfeiture Proceedings. – In all proceedings

for the forfeiture of any vehicle, vessel, aircraft, or goods under this Act, the
burden of proof shall be borne by the claimant.
SEC. 1124. Settlement of Pending Seizure Case by Payment of Fine or
Redemption of Forfeited Goods. – Subject to the approval of the
Commissioner, the District Collector may allow the settlement by payment of
fine or the redemption of forfeited goods, during the course of the forfeiture
proceeding. However, the Commissioner may accept the settlement by
redemption of any forfeiture case on appeal. No settlement by payment of
fine shall be allowed when there is fraud or when the discrepancy in duties
and taxes to be paid between what is determined and what is declared
amounts to more than thirty percent (30%).
In case of settlement by payment of fine, the owner, importer, exporter, or
consignee or agent shall offer to pay a fine equivalent to thirty percent
(30%) of the landed cost of the seized goods. In case of settlement by
redemption, the owner, importer, exporter, or consignee or agent shall offer
to pay the redeemed value equivalent to one hundred percent (100%) of the
landed cost.
Upon payment of the fine or payment of the redeemed value, the goods
shall be released and all liabilities which may attach to the goods shall be
discharged without prejudice to the filing of administrative or criminal case.
Settlement of any seizure case by payment of the fine or redemption of
forfeited goods shall not be allowed when there is fraud, or where the
importation is prohibited or the release of the goods is contrary to law.

SEC. 1125. Decision in Forfeiture Cases. – In forfeiture cases, the District

Collector shall issue an order for hearing within fifteen (15) days, or five (5)
days in case of perishable goods, from issuance of the warrant. The District
Collector shall render a decision within thirty (30) days upon termination of
the hearing, or within ten (10) days in case of perishable goods. The
decision shall include a declaration of forfeiture, the imposition of a fine or
such other action as may be proper.
APPEAL IN PROTEST AND FORFEITURE CASES
SEC. 1126. Appeal to the Commissioner. – In forfeiture cases, the person
aggrieved by the decision of a District Collector may, within fifteen (15) days
or five (5) days in case of perishable goods, from receipt of the decision, file
a written notice of appeal, together with the required appeal fee to the
District Collector, furnishing a copy to the Commissioner. The District
Collector shall immediately transmit all the records of the proceedings to the
Commissioner, who shall review and decide on the appeal within thirty (30)
days from receipt of the records, or fifteen (15) days in the case of
perishable goods: Provided, That if within thirty (30) days, no decision is
rendered, the decision of the District Collector under appeal shall be deemed
affirmed. An appeal filed beyond the period herein prescribed shall be
dismissed.
Appeals to protest cases shall be governed by Section 114 of this Act.
The decision of the Commissioner may be served through the recognized
modes of service under existing law.

SEC. 1127. Automatic Review in Forfeiture Cases. – The Commissioner shall

automatically review any decision by the District Collector adverse to the
government. The entire records of the case shall be elevated within five (5)
days from the promulgation of the decision. The Commissioner shall decide
on the automatic review within thirty (30) days, or within ten (10) days in
the case of perishable goods, from receipt of the records. When no decision
is rendered within the prescribed period or when a decision adverse to the
government is rendered by the Commissioner involving goods with FOB or
FCA value of ten million pesos (P10,000,000.00) or more, the records of the
decision of the Commissioner, or of the District Collector under review, as
the case may be, shall be automatically elevated within five (5) days for
review by the Secretary of Finance. The decision issued by the Secretary of
Finance, whether or not a decision was rendered by the Commissioner within
thirty (30) days, or within ten (10) days in the case of perishable goods,
from receipt of the records, shall be final upon the Bureau.

SEC. 1128. Automatic Review by the Secretary of Finance in Other Cases. –

In cases not involving protest or forfeiture, the Commissioner shall
automatically review any decision by the District Collector that is adverse to
the government. The records of the case shall be elevated to the
Commissioner within five (5) days from the promulgation of the decision.
The Commissioner shall decide on the automatic review within thirty (30)
days from receipt of the records, or within ten (10) days in the case of
perishable goods. When no decision is rendered within the prescribed period
or when any decision rendered by the Commissioner is adverse to the
government, the records of the ease under review shall be automatically
elevated within five (5) days for the review of the Secretary of Finance. The
decision issued by the Secretary of Finance, whether or not a decision was
rendered by the Commissioner within thirty (30) days from receipt of the
records, or within ten (10) days in the case of perishable goods, shall be
final upon the Bureau.

ABANDONMENT
SEC. 1129. Abandonment, Kinds and Effects of. – Imported goods are
deemed abandoned under any of the following circumstances:
(a) When the owner, importer, or consignee of the imported goods expressly
signifies in writing to the District Collector the intention to abandon the
same; or
(b) When the owner, importer, consignee, or interested party after due
notice, fails to file the goods declaration within the prescribed period in
Section 407 of this Act: Provided, That the term goods declaration shall
include provisional or incomplete goods declaration deemed valid by the
Bureau as provided in Section 403 of this Act. For this purpose, it is the duty
of the District Collector to post a list of all packages discharged and their
consignees, whether electronically or physically in the District Office, or send
a notice to the consignee within five (5) days from the date of discharge; or
(c) Having filed such goods declaration, the owner, importer, consignee or
interested party after due notice, fails to pay the assessed duties, taxes and
other charges thereon, or, if the regulated goods failed to comply with
Section 117 of this Act, within fifteen (15) days from the date of final
assessment: Provided, That if such regulated goods are subject of an alert
order and the assessed duties, taxes and other charges thereof are not paid
within fifteen (15) days from notification by the Bureau of the resolution of
the alert order, the same shall also be deemed abandoned; or
(d) Having paid the assessed duties, taxes and other charges, the owner,
importer or consignee or interested party after due notice, fails to claim the
goods within thirty (30) days from payment. For this purpose, the arrastre
or warehouse operator shall report the unclaimed goods to the District
Collector for disposition pursuant to the provisions of this Act; or
(e) When the owner or importer fails to claim goods in customs bonded
warehouses within the prescribed period.
The due notice requirement under this section may be provided by the
Bureau through electronic notice or personal service: Provided, That for non-
regular importers, notification shall be by registered mail or personal
service. For this purpose, the accreditation of importers, exporters, and
other third parties shall include provision for mandatory receipt of electronic
notices.

SEC. 1130. Treatment and Disposition of Abandoned Goods. – Expressly

abandoned goods under paragraph (a) of Section 1129 of this Act shall ipso
facto be deemed the property of the government and shall be disposed of in
accordance with the provisions of this Act.
If the Bureau has not disposed of the abandoned goods, the owner or
importer of goods impliedly abandoned may, at any time within thirty (30)
days after the lapse of the prescribed period to file the declaration, reclaim
the goods provided that all legal requirements have been complied with and
the corresponding duties, taxes and other charges, without prejudice to
charges and fees due to the port or terminal operator, as well as expenses
incurred have been paid before the release of the goods from customs
custody.
When the Bureau sells goods which have been impliedly abandoned,
although no offense has been discovered, the proceeds of the sale, after
deduction of any duty and tax and all other charges and expenses incurred
as provided in Section 1143 of this Act, shall be turned over to those
persons entitled to receive them or, when this is not possible, held at their
disposal for a specified period. After the lapse of the specified period, the
balance shall be transferred to the forfeiture fund as provided in Section
1151 of this Act.