Procedure for Disposition of Abandoned, Unclaimed, Seized or Forfeited Articles or Properties under Customs Custody

May 8, 1990

NATIONAL EMERGENCY MEMORANDUM ORDER NO. 20

PROVIDING FOR A PROCEDURE FOR AN EXPEDITIOUS AND ORDERLY DISPOSITION OF ABANDONED, UNCLAIMED, SEIZED OR FORFEITED ARTICLES OR PROPERTIES UNDER CUSTOMS CUSTODY

WHEREAS, noting that "[t]he economy has suffered and continues to suffer a serious setback, severely disrupting the momentum of our economic recovery," Congress has granted emergency powers to the President to, among others, "optimize the efforts of the President to carry out the difficult task of economic reconstruction" (Sections 1 and 2 of R.A. No. 6826);

WHEREAS, the funds needed for the government's basic programs and projects for our economic recovery may be sourced immediately through an expeditious and orderly procedure for disposition of abandoned, unclaimed, seized, or forfeited articles or properties under Customs custody, subject to certain safeguards;

WHEREAS, Republic Act No. 6826, Section 3 (11) authorizes the President "[t]o undertake such other measures as may be reasonable and necessary to enable the President to carry out the declared national policy subject to the Bill of Rights and other constitutional guarantees";

NOW, THEREFORE, I, CORAZON C. AQUINO, President of the Philippines, by virtue of the powers vested in me by the Constitution and Republic Act No. 6826, do hereby order:

SECTION 1. This Memorandum Order shall govern the disposition of goods forfeited in favor of the government and other property under Customs custody subject to sale as enumerated in Section 2601 of the Tariff and Customs Code of the Philippines, as amended, for a limited period until June 8, 1990.

The sale shall always be done in an individual basis. However, sale by lot may be allowed in such manner as the Bidding Committee hereunder created may authorize. The Committee shall reclassify items of bid lots to sublots of like or similar items with their respective floor prices.

SECTION 2. The Bidding Committee is hereby constituted as follows:

Chairman	—	The Chief, Auction and Cargo
		Disposal Division
		Bureau of Customs
Vice-Chairman	—	The Chief, Valuation and
		Classification Division
		Bureau of Customs
Members	—	Representative, Department of
		Finance
	—	Representative, Economic
		Intelligence and Investigation
		Bureau
	—	Representative, Customs Intelligence
		and Investigation Service
		Bureau of Customs
	—	Representative, Enforcement and
		Security Service
		Bureau of Customs
	—	The Chief, Law Division
		Bureau of Customs

The Resident Auditor, Commission on Audit, shall act as witness during the proceedings of the Committee and in the conduct of the disposition of goods pursuant to this Memorandum Order.

The Committee shall have the following functions and responsibilities:

a. To supervise the preparation of and to conduct the sale/disposition of property subject of this Memorandum Order;

b. To reject any or all bids/offers or any part thereof, waive any required formalities, and accept bids/offers most advantageous to the interest of the government;

c. To determine/set the floor prices of articles/lots for sale or disposition.

SECTION 3. Bidders/participants to the public auction shall be afforded an opportunity to examine/inspect all the items/lots put up for auction on the date/time fixed by the Committee.

SECTION 4. In order to ensure competitive bidding and maximize the proceeds, the sealed bid system shall apply to the public auction subject to the following procedure and requirements:

a. A Notice of Auction of the items/lots put up for sale shall be advertised in two (2) national newspapers of general circulation at least five (5) days prior to the date of the initial sale. Thereafter, the auction sale shall be held continuously every other day until the items/goods/lots to be sold under this Memorandum Order shall have been disposed of or until June 8, 1990 and such procedure shall be indicated in the aforesaid Notice of Auction.

b. Unless otherwise indicated, articles subject of public auction shall be offered for sale on an "As Is Where Is" basis, with no warranty given as to their condition, in order to preclude claims for refund, restitution, reparation, or substitution in the future.

c. The Committee shall provide tamper proof drop boxes as there are sale lots put up for auction. All bids/offers shall be contained in envelopes which shall be properly sealed before the same are dropped in the drop boxes.

d. In all public auction sales, particularly where such sales cover articles that would adversely affect identical or similar articles locally manufactured, representatives from the Department of Trade and Industry and the industry sector/association concerned shall be authorized to be present as observers.

SECTION 5. The procedure and requirements in auction sale shall be as follows:

a. Before a participant may be allowed to participate in a particular auction sale covered by a Notice of Auction, such bidder shall present to the Committee a certification duly issued by bidder's bank indicating the amount of cash deposit therein as of the date of the sale.

b. The bidder/participant shall be required to put up a cash bond in the amount of P20,000.00 for which the Customs cashier shall issue a temporary receipt. The amount shall be refundable to the losing bidder after the closing of the auction sale.

c. The bidder/participant shall register with the Committee and present the following:

1. Temporary receipt covering the cash bond: and

2. Certification as to the amount of cash deposit issued by the bidder/participant's bank.

d. All bids shall be indicated by and under the signature of the bidder/participant or authorized representative in the official bid tender forms which shall be issued in such number as to correspond with the number of sale lots put up on the auction block and for which the bidder/participant intends to submit bids.

 The bidder or authorized representative shall drop his bid offer contained in a sealed envelope in the assigned drop box for the particular sale lot. He may drop all his bid tenders contained singly in an envelope one at a time before the auctioneer announces the closing time for dropping of bid tenders. After such announcement of the closing time which has arrived, no further bid tenders shall be allowed.

e. After casting any number of bids, the bidder may leave the auction room and return only during the tabulation of the bids conducted by the Committee. The tabulation may be witnessed by the bidder or a duly authorized representative.

f. After the completion of the tabulation and collation of the bids cast, the following shall be observed:

1. The Chairman or auctioneer designated by the Committee announces the name of the highest bidder and of the bid as duly certified and signed by the Committee and the resident auditor.

2. The highest bidder pays immediately on the spot the amount equivalent to fifty (50) percent of the total bid price in cash or cashier's or manager's check.

3. The Chairman of the Committee or the auctioneer thereupon awards the sale to such higher bidder.

g. In case of tied bids, the subject items/lots shall be re-bidded among the bidders involved. In case of another tie, the winner shall be determined by drawing of lots.

h. In case of default of the highest bidder to pay the required fifty (50) percent of the bid price, the second and the third highest bidders shall be allowed, in that order, to raise their bids to an amount equal to that of the defaulting highest bidder and shall, thereby be required to pay fifty (50) percent of the bid price and be awarded the sale accordingly.

 The defaulting highest bidder shall be disqualified from further participation in the auction sale authorized under this Memorandum Order, without prejudice to the imposition of whatever sanctions that the Committee may decide.

i. The winning bidder shall make full payment of all the items/lots awarded to him within forty-eight hours from the time of the award.

 Failure on the part of the awardee to so make full payment within said period shall cause the automatic cancellation of the award, and the forfeiture of the fifty (50) percent down payment in favor of the government.

j. The winning bidder shall have forty-eight hours from the date of the sale within which to claim and receive delivery of the articles/lots.

 Where the winning bidder fails to claim and receive delivery of the articles/lots awarded to him within five (5) days from the date of sale, he shall be deemed to have abandoned said goods and to have renounced all rights thereto. In addition, all payments already made therefor, including the fifty (50) percent down payment, shall be forfeited in favor of the government.

SECTION 6. In cases where the sealed bids are clustered very close to the announced floor price and are within ten percent of the highest bid, the Committee shall immediately conduct an open re-bidding among all bidders present.

SECTION 7. The Committee shall dispose of at least eighty (80) percent of the total property under Customs custody subject to sale pursuant to Section 2610 of the Tariff and Customs Code, not later than June 8, 1990.

SECTION 8. Any articles/lots which remain unsold after June 8, 1990 shall be disposed of strictly in accordance with the provisions of Section 2610 of the Tariff and Customs Code as amended.

SECTION 9. Any award or decision by the Committee in accordance with this Memorandum Order shall be final, executory and non-appealable. The Committee shall ensure that a copy of this Memorandum Order shall be conspicuously posted at the place of the auction sale at all times. The Committee shall submit a detailed report on all auctions made under this Memorandum Order to the Office of the President for compliance with Section 4 of Republic Act No. 6826.

SECTION 10. The General Manager of the Philippine Ports Authority is hereby directed to give priority to all requests of the Committee for the utilization/assignment of arrastre personnel and hauling equipment in the transfer and segregation and delivery of the subject items/lots.

SECTION 11. This urgent Memorandum Order shall take effect two (2) days after its publication in at least two (2) national newspapers of general circulation.

DONE in the City of Manila, this 8th day of May, in the year of Our Lord, Nineteen Hundred and Ninety.