Guidelines on the Implementation of CAO No. 06-2016 on Conditionally Tax and/or Duty-Exempt Importation of Returning Residents and Returning OFWs

July 28, 2017

CUSTOMS MEMORANDUM ORDER NO. 015-17

 

SECTION 1. Scope. — This CMO implements Section 800 (f) of the Customs Modernization and Tariff Act (CMTA)pertaining to tax and duty-free importations of personal and household effects belonging to Returning Residents and Returning Overseas Filipino Workers (OFWs). This also covers the additional tax and/or duty exemption of Returning OFWs for home appliances and other durables in the amount not exceeding Php150,000.00.

SECTION 2. Objectives. —

2.1. To prescribe simplified customs clearance procedures for tax and/or duty-free importations of personal and household effects belonging to Returning Residents and Returning Overseas Filipino Workers (OFWs) in recognition of their significant contribution to the Philippine economy;

2.2. To delineate the duties and responsibilities of the different offices of the Bureau involved in the customs clearance process of shipments covered by this Order;

2.3. To set guidelines in the availment of the additional tax and/or duty exemption for Returning OFWs for their home appliances and other durables in the amount not exceeding Php150,000.00; and

2.4. To guide customs personnel and stakeholders on customs clearance formalities of the importations covered by this Order.

SECTION 3. General and Administrative Provisions. —

3.1. Returning Residents and Returning Overseas Filipino Workers (OFWs) availing of the privilege under this Order must apply with the Revenue Office of the Department of Finance (DOF) for the issuance of a Tax Exemption Indorsement (TEI). 1

3.2. The application for TEI may be submitted to the DOF either personally or through a representative with a duly notarized authorization, together with the following: 2 CAIHTE

a. Letter-request addressed to the Secretary of Finance, Attention: Director IV, Revenue Office;

b. Affidavit of End-Use or Ownership;

c. Import Bill of Lading/Airway Bill (BL/AWB) indicating the Port of Discharge, properly endorsed by the shipping agent/air carrier, respectively;

d. Import Invoice and/or Packing List;

e. Proof of residency/employment abroad for returning Filipino residents/returning OFWs, as the case may be;

f. Original Passport (to be presented only for verification purposes) with attached photocopy of the biographical page and page/s with Immigration stamp of the last departure and latest arrival; and

g. Tax Identification Number (TIN).

3.3. Submission of Documentary Requirements.

3.3.1. Personal and Household Effects Declaration (PHED) Form. To expedite cargo clearance formalities, the Returning Resident, Returning OFW or his authorized representative shall accomplish, sign and submit to the Bureau, a fully accomplished Personal and Household Effects Declaration (PHED) Form (Annex "A") which may be downloaded from the BOC website or secured at the Customs arrival area and shall contain, among others, the following basic information:

a. Complete name of the shipper, date of birth, citizenship, passport number, address abroad and in the Philippines, contact number and e-mail address, if any;

b. Names of accompanying family members and their respective passport numbers;

c. Date of last departure from the Philippines;

d. Estimated or actual date of arrival of the Returning Resident or Returning OFW in the Philippines;

e. Length of stay abroad;

f. Packing List Information which shall contain an itemized listing of all goods and their respective quantities and description;

g. Unit value of each item and total value of the goods; and

h. Shipment details (Letter B, page 2 of PHED form).

In cases where the Returning Resident or Returning OFW opts for the conditional release of their shipments arriving before their actual date of return in the country, the PHED must be submitted in advance to the Informal Entry Division (EID) or equivalent unit of the port concerned for cargo clearance formalities. DETACa

For shipments arriving as accompanied baggage, the Returning Resident or Returning OFW shall submit to the Customs Officer the accomplished PHED Form upon arrival.

3.3.2. Supporting Documents. The Bureau shall, in addition to the Informal Import Declaration and Entry (IIDE), require the submission of the following documents:

a. Duly filled out PHED Form;

b. TEI;

c. BL or AWB duly endorsed by the shipping agent or air carrier, respectively;

d. Certificate of Identification (CI), if any;

e. Permits/Licenses, if necessary;

f. Accomplished Permit to Deliver Imported Goods (PDIG), for sea freight shipment; and

g. Other necessary documents as may be required by the Bureau.

3.4. Conditional Release of Shipments Arriving in Advance. Shipments arriving in advance of the date of return of a Returning Resident or Returning OFW and without the requisite TEI may be allowed conditional release upon the posting of a cash bond equivalent to one hundred percent (100%) of the assessed duties and taxes due thereon.

3.5. Importation of Personally-Owned Vehicles (POVs). Personal effects and household goods shipped together with personally-owned motor vehicles, even if stowed in one shipping or aircraft container shall be covered by separate BLs/AWBs, one to cover the personal effects and household goods and another BL/AWB to cover the motor vehicle which shall be cleared under the formal entry process and subject to existing rules and regulations.

In cases where a single BL/AWB has been issued for said goods, a formal request from the consignee or his authorized representative shall be made to the Collector of Customs for the amendment of the manifest and the splitting of the BL/AWB.

Importation of personally-owned motor vehicles shall not be entitled to the exemption-privilege granted under Section 800 (f) of the CMTA.

3.6. All shipments under this Order shall be subjected to mandatory non-intrusive inspection. To prevent delays in the processing and release thereof, issuance of Alert Orders, if warranted, against shipments of personal effects and household goods may be made only after the same has undergone the mandatory non-intrusive inspection.

SECTION 4. Operational Provisions. — Pending full automation, the procedures on the advance submission of the Electronic-Inward Foreign Manifest (E-IFM) and clearance of cargoes under the informal entry process shall be observed. aDSIHc

4.1. Advance Submission of Electronic-Inward Foreign Manifest (E-IFM), BL and AWB. Submission of the E-IFM shall be governed by the rules and regulations of the Bureau relative to the submission of cargo manifest. For purposes of uniformity in documentation and to distinguish Single Consignee shipments of Personal Effects and Household Goods from other importations, the words "PERSONAL AND HOUSEHOLD EFFECTS" shall be indicated by the shipping agent in the field for Description of Goods in the BL or AWB.

4.2. Filing of Goods Declaration. The declarant or his authorized representative shall file the goods declaration at the Informal Entry Division (IED) or equivalent unit of the port concerned, using the prescribed IIDE together with the PHED Form and the other documentary requirements, as provided in Section 3.3.2 of this Order.

The Chief of the IED or equivalent unit shall assign a Customs Examiner/s for the processing of the goods declaration.

4.3. Conduct of Non-Intrusive Inspection. The declarant or his authorized representative, after filing of the goods declaration, shall present a copy of the same to the x-ray field inspection office for the mandatory non-intrusive inspection. The XIP field office shall officially forward the printed copy of the x-ray image to the IED or equivalent unit through the assigned Customs Examiner.

In cases where the x-ray inspection is terminated beyond the regular office hours, submission shall be made on the first hour of the next working day.

4.4. Processing at the Informal Entry Division (IED) or Equivalent Unit.

4.4.1. If the x-ray image is tagged "no suspect" and the print-out thereof is stamped by the X-Ray Image Analysis Inspector with the notation "IMAGE APPEARS TO BE REGULAR," the COO III shall make a return of findings, assess the duties and taxes, if any, and other charges due thereon, affix his signature on the goods declaration and forward the same to the COO V.

4.4.1.1. The COO V shall review the IIDE, tariff classification, appraisal, computation of duties, taxes and other charges for final assessment, affix his signature on the IIDE, prepare the Order of Payment and forward the same to the Chief of the IED or equivalent unit for approval.

4.4.1.2. In case of air shipments, the Order of Payment shall be presented to the BOC Cashier who shall issue a BOC Official Receipt (BCOR) evidencing payment of the duties, taxes, service fees and other charges due. The BOC Cashier shall then issue the gatepass (BOC Form No. 201) and forwards the same together with the BCOR to the IED or equivalent unit for signature of the COO III and COO V.

A copy of the IIDE, original copy of the BCOR, gate pass and other supporting documents shall be transmitted to the Customs Warehouseman who shall affix his signature on the face of the gatepass to effect the physical release of the goods.

4.4.1.3. In case of sea shipments, the Order of Payment shall be presented to the BOC Cashier or to the In-House Bank for payment using the e2m Cash-Miscellaneous Module.

The COO III shall verify payment in the electronic payment system. After verifying that the appropriate payment has been made, the COO III shall retrieve the data corresponding to the BL of the IIDE. The COO III shall select from the e-manifest menu the operation "Manual Discharge" to perform manual write-off of the BL.

4.4.2. In cases where the x-ray image is tagged "suspect" and the print-out thereof is stamped by the X-Ray Image Analysis Inspector with the notation "FOR VERIFICATION," the COO III shall conduct physical examination in the presence of representatives from the Enforcement and Intelligence Groups, XIP and the Broker's or Consignee's representatives; TIADCc

a. If no discrepancy is found, prepare and sign a report together with all the witnesses to the physical examination and make a return of findings, assess duties, taxes and other charges due thereon, if any, affix his signature on the goods declaration and forward the same to the COO V and the procedures in Sections 4.4.1.1 to 4.4.1.3. of this Order shall apply.

b. If discrepancy is found, the COO III shall prepare a discrepancy report and recommend for the payment of additional duties and taxes or seizure of the shipment, as the case may be.

SECTION 5. Accompanied Baggage of Returning Residents or Returning OFWs. —

5.1. In general, accompanied baggage of Returning Residents and Returning OFWs shall be subject to non-intrusive inspection except when the same is subject of derogatory information or selection based on profiling or risk management parameters in which case, physical examination shall be conducted thereon.

5.2. A Returning Resident or Returning OFW with accompanied baggage who opts to avail in full of the privilege under Section 800, subparagraph (f) of the CMTA but without the required TEI, must comply with the following:

5.2.1. Submission by the Returning Resident or Returning OFW to the Customs Officer, upon arrival, of the following documents:

a. Duly filled out PHED Form;

b. Customs Baggage Declaration Form (CBDF);

c. Photocopy of the biographical page of the passport including the page/s with Immigration stamp of the last departure and latest arrival;

d. Invoice, receipt or equivalent document covering the goods contained in the shipment, if any;

e. CI or Authenticated Owner's Declaration, if any; and

f. Other necessary documents as may be required by the Bureau.

5.2.2. Posting of a cash bond with the BOC Cashier equivalent to 100% of the assessed duties and taxes; and

5.2.3. Approval of the Chief, Arrival Operations Division or Duty Collector for the release of the goods.

5.2.4. Submission of TEI within forty-five (45) days from his arrival but not to exceed sixty (60) days from the release of the shipment. AIDSTE

5.3. In the event that the Returning Resident or Returning OFW opts not to post a cash bond, the goods shall be temporarily stored at the Customs In-Bond Baggage Room or any equivalent facility, pending submission of the TEI from the DOF to support his claim of the privilege. The TEI must be submitted to the Bureau by the Returning Resident or Returning OFW not later than thirty (30) calendar days from the date of arrival or the latter can pay the full duties and taxes within the same period. After the lapse of the period, the goods shall be deemed abandoned.

SECTION 6. Forfeiture/Refund of Cash Bond. — Failure of the Returning Resident or Returning OFW to submit to the Bureau the TEI from the DOF, within forty-five (45) days from his arrival but not to exceed sixty (60) days from the release of the shipment, to support his claim of the privilege, shall cause the forfeiture of the cash bond posted to answer for the payment of the duties and taxes due thereon.

Any claim for refund of the cash bond posted by the Returning Resident or Returning OFW shall be governed by existing Customs rules and procedures.

SECTION 7. Treatment of Alerted Shipments. — Processing of shipments subject to Alert Orders issued by the Bureau shall be governed by the regulations on Alert.

SECTION 8. Exclusions. — The following shall not be entitled to the exemption privilege granted under Section 800, subparagraph (f) of the CMTA:

a. Luxury items, unless covered by a pre-departure Certificate of Identification;

b. Vehicles;

c. Watercrafts;

d. Aircrafts;

e. Animals;

f. Donations;

g. Goods intended for barter, sale or for hire;

h. Goods in Commercial Quantity; and

i. Regulated Goods in excess of the limits allowed by regulations.

SECTION 9. Repealing Clause. — This CMO specifically amends or repeals previously issued CMOs which are inconsistent with the provisions herein stated.

SECTION 10. Effectivity. — This CMO shall take effect immediately. AaCTcI

(SGD.) NICANOR E. FAELDONCommissioner

ANNEX A

Personal and Household Effects Declaration Form

Footnotes

1.Formerly Tax Exemption Certificate (TEC).

2.cf. Revenue Office manual 2016.