[ BOC MEMORANDUM ORDER NO. 3-95, January 24, 1995 ]
REVISED PROCEDURES ON THE RELEASE OF SHIPMENTS THRU TENTATIVE LIQUIDATION PURSUANT TO JOINT ORDER NO. 1-91
Objectives
1. To avoid delays in the processing and releasing of shipments occasioned by disputes arising from the SGS-CRF in relation to Joint Order No. 1-91.
2. To expedite the resolution of cases referred to the Customs-SGS Imports Valuation and Classification Committee (hereinafter referred to as the Appeals Committee).
3. To further facilitate trade and at the same time provide adequate security to government revenue.
4. To enable the prompt collection of revenue due the government.
II.
Coverage
This Order shall cover shipments where:
1. The importer contests the valuation, classification, freight and/or dutiable charges reflected in the SGS-CRF.
2. The Examiner/Appraiser has sufficient justification to doubt/question the correctness of the SGS-CRF valuation and/or classification which would result to a lower assessment of duties and taxes.
III.
Administrative Provisions
3.1 Approving Authority for Tentative Releases
| 3.1.1 | There is hereby created an Appeals Committee (Secretariat) which shall be composed of evaluating officers with technical background headed by an Executive Director. For shipments entered at the NAIA, MICP and POM, the Secretariat shall receive request for tentative releases pursuant to the order and process the same for approval of the Executive Director. |
| 3.1.2 | For shipments entered other than at NAIA, MICP and POM, the Chief of the Formal Entry Division (FED) or equivalent unit shall evaluate requests for approval by the Collector of Customs or his duly designated representative. After approval, the duly accomplished application, certified true copy of the Official receipt evidencing payment of filing fee (CAO 8-94 and CMO 48-94) and supporting documents required under 3.2.3 must be submitted to the Secretariat for study by the ACS which will send advisory on the final disposition to be undertaken on the request. |
3.2 When Tentative Releases may be allowed
| 3.2.1 | Tentative releases pursuant to this order may only be allowed when there is strong PRIMA FACIE case that the CRF findings is grossly inaccurate or is totally wrong. |
| 3.2.2 | There is NO PRIMA FACIE case of gross inaccuracy or wrong findings whenever the following are obtaining: |
3.2.2.1 The commodity involved has a similar case already previously decided by the Appeals Committee where the decision on value is within (+) or (-) 20% of the CRF findings at hand or the classification in the decision file is the same as the CRF classification being questioned.
3.2.2.2 Where there is a value on file with the Valuation Center and Library not more than six (6) months old and which is not less than 80% of the CRF value.
| 3.2.3 | Prima Facie proof must be presented by the applicant showing data supporting his application. However, only proofs that are VERIFIABLE and are of the nature of public documents/materials are admissible such as: |
3.2.3.1 Printed domestic price list in the country of export
3.2.3.2 Value Information from the Philippine Commercial Attache in the country of supply
3.2.3.3 Printed schedule of discount
3.2.3.4 Proof that questioned item is not being sold domestically in the country of export
3.2.3.5 Previous Clean Report of Findings (CRF) on the same or identical articles from the same country of exportation
3.2.3.6 Customs, DOF, Tariff Commission rulings
3.2.3.7 Court rulings
3.2.3.8 Customs published value which is not otherwise covered by 3.2.2.2
3.2.3.9 Previous committee decisions otherwise not covered by 3.2.2.1
| 3.2.4 | Documents to be submitted: |
3.2.4.1 Importer's Referral/Information Sheet
3.2.4.2 Position Paper
3.2.4.3 Entry and Supporting Documents as mentioned in 3.2.3 above.
3.3 Grounds for Withdrawal of Tentative Release - Tentative release of shipments earlier approved by the Secretariat shall be deemed automatically withdrawn and the shipment proceeded against in accordance with existing applicable rules and regulations under the following circumstances:
| 3.3.1 | When upon examination of the shipment by the Formal Entry Division or equivalent unit the article/s whose CRF value and/or classification being contested is substantially different from or is/are not materially comparable with that described in the application for tentative release. |
| 3.3.2 | When upon examination of the shipment and/or review of import documents by FED, a violation of the TCCP, as amended or other related laws, has been established, such as misdeclaration, underevaluation, overquantity, misclassification or lack of requisite import authority which constitutes a prima facie basis for the issuance of a Warrant of Seizure and Detention. |
| 3.3.3 | Refusal to comply on the form of the security - If the importer fails to put up the required manager/s cashier's check within 15 days from the determination by the Chief of the Collection Division of the form of the security which period may be extended for another 15 days upon written request of the importer, the approval of tentative release by the Appeals Committee shall be deemed withdrawn and the shipment proceeded against pursuant to existing laws, rules and regulations without the benefit of tentative release. |
3.4 Government Security on Tentative Releases
| 3.4.1 | Form of the Security - To secure government revenue pending resolution of an appeal, the importer shall be required a guarantee which may take the form of either Manager's /Cashier's check or a company post-dated check subject to the determination of the Chief, Collection Division following the guidelines in 3.4.2 below. |
| 3.4.2 | Determination of the Form - In determining the form of the guarantee, the Chief Collection Division of the port shall limit acceptance of a company post-dated check to the following cases: |
3.4.2.1 Companies in the top 3,000 corporations list of the Securities and Exchange Commission.
3.4.2.2 Companies that can prove themselves to be "GOING CONCERNS" because their audited financial statements for the last 5 years shows 5-year continuous operations with assets of at least P 15 million and net profits in percent of asset of at least 5%.
| 3.4.3 | Disqualification from PDCS - The provisions of 3.4.2 notwithstanding, companies with delinquent accountabilities with the Bureau by virtue of their inclusion in a blacklist or Hold Order List to be provided and maintained by the Office of the Commissioner of Customs shall not be allowed to post-date checks to secure the tentative release of their shipment. |
| 3.4.4 | Amount of the Security - The amount of the security (managers/cashier's check or PDC shall be determined as follows: |
3.4.4.1 Where the issue is valuation and/or classification, it shall be equivalent to the difference in the duties, taxes and other charges as between that due on the CRF and the lower value and/or classification as claimed by the importer.
However, the importer shall not be required to put up such security where the valuation issue is raised at the instance of the Examiner/Appraiser, but the import entry in such cases shall be marked and so considered as one under Tentative Liquidation.
This means that a security is also necessary should the appraiser dispute the CRF classification with the appraiser's classification having a higher rate of duty.
| 3.4.5 | Issue Date of PDC - In cases where PDCs are accepted as the security, the issue date appearing thereon must be within 30 days from date of approval by the Secretariat of the tentative release in case of NAIA, POM and MICP and within 60 days from date of approval by the Chief, FED or equivalent unit in case of outports. |
3.5 Period to Resolve Appeals and Action on Delayed Cases.
| 3.5.1 | Cases elevated to the Appeals Committee must be resolved within sixty (60) days from date of provisional receipt. |
| 3.5.2 | If for any reason the case is not resolved within 60 days, a report must be submitted to the Commissioner stating the reason for the delay. The Committee shall schedule a special session once a month to resolve delayed cases with the Commissioner of Customs in attendance. |
| 3.5.3 | List of PDCs about to become stale - If 120 days from the date of PDC issue, there are still no decisions on the case, a list of cases with PDCs about to become stale must be generated and submitted to the Chairman, Appeals Committee. The Chairman must cause the posting of such a list with a call to the concerned importers to replace the check within 15 days, otherwise the cases shall be resolved immediately in favor of the government. |
| 3.5.4 | List of PDCs for Mandatory Deposit - A PDC becomes stale 180 days from issue date. If 150 days from issue date and the PDC has not been replaced as provided for in 3.5.3 and there is yet no decision on the case that would render the PDC unnecessary, the PDCs must be mandatorily deposited to an appropriate government depository bank. To insure that such is done, a list of PDCs for mandatory deposit must be regularly generated for action by the Collection Division. |
| 3.5.5 | List of Cases for Mandatory Decision - If 210 days from the provisional receipt date, no decision has been rendered by the Appeals Committee, the Executive Director shall automatically elevate these cases to the Commissioner for final decision. |
3.6 Finality of Committee Resolution - cases resolved shall be deemed final and executory from date of the receipt of the decision by the Collection Division. The Committee Secretariat shall furnish the Collection Division directly with a copy of the committee resolution. The Executive Director shall also furnish the importer with copy of such decision directing them to see the Chief of the Collection Division within 10 days for final liquidation of the entry.
3.7 CRF Amendment - When a case is already elevated to the Committee or at any time thereafter, SGS shall not cause the issuance of an amendment to the CRF in dispute unless upon instruction by the Committee. Any amendment made by SGS within the period contemplated in the foregoing shall have an evidentiary value but will not operate to affect or supersede the Committee resolution on the disputed CRF, unless the Committee itself decides to adopt the amended CRF on its resolution.
3.8 Nature of Committee Proceedings - The resolution of cases shall be summary in character and the Committee may decide ex parte on the basis of documentary evidence on record without need of the importer being present except when the Committee would like to raise clarificatory questions.
IV
Operational Provisions
4.1 Processing at the Secretariat
| 4.1.1 | Importers shall file with the Appeals Committee Secretariat a completely filled referral sheet together with documents showing prima facie proof in support of the request for tentative release. Upon acceptance of the above documents, the Secretariat shall enter the available data in 3.2.5.1 to the CRF Dispute Settlement System (CRF-DSS). A worksheet addressed to the Executive Director shall be computer generated showing the similar cases previously resolved by the Committee or existence of value information from the Valuation Center and Library to guide him in his action. The Secretariat shall indicate their recommended course of action to the Executive Director in the worksheet. Together with the worksheet shall be the 1st indorsement to be generated by the computer approving or disapproving the release of the shipment under tentative liquidation. |
| 4.1.2 | A copy of the importer's referral sheet and complete supporting documents shall be stamped received by the Secretariat to be returned to the importer/claimant indicating thereon the date/time of receipt and the date the importer can come back for the action taken by the Secretariat which must be within 48 hours from filing. The Executive Director can refuse acceptance of the application for tentative release if the importer's referral sheet has not been duly filled and the supporting documents are not complete. |
| 4.1.3 | The Executive Director shall send a letter to SGS-MLO forwarding a copy of the referral sheet including the supporting documents and requesting SGS to evaluate the appeal, verify the supporting documents, report on the basis of the CRF value/classification and to prepare a comparative table of values/competing tariff headings. SGS should establish comparability on a per item basis among the article/s as described in the referral sheet and the description in the CRF and the article/s as indicated in the importer's evidence such as price list, previous CRF, discount schedule, previous committee decision, published or established value and the like. For this purpose, a matrix or table of comparison shall be made showing the comparability of the item/s involved including the unit fair market value, freight, other dutiable charges or the competing tariff headings. |
| SGS shall inform the Appeals Committee when they are ready to present the case for hearing so that proper scheduling can be made. |
|
| 4.1.4 | Within 72 hours from receipt of appeals and supporting documents, the Secretariat must forward the copy of the referral sheet, entry and supporting documents to the District Collector of Customs. Attn: Entry Processing Division via special courier with its Indorsement on the approval/disapproval of the appeals plus the special instructions. Special procedure must be set in place for the transmittal to prevent switching or hijacking of papers. |
4.2 Processing from EPD to FED
| 4.2.1 | The Chief, EDP or a duly designated officer shall receive the entry documents from the special courier and check the same to insure no substitution. He shall verify by telephone the contents of the transmittal sheet with the Secretariat. He shall then forward the documents to the perforating clerk. |
| 4.2.2 | The REGULAR clearance process shall govern shipments covered by this Order. |
| 4.2.3 | FED must pay particular attention to the examination instructions and the main issue of the appeal to obtain evidence that would result in the early resolution of the case. Such evidence must be presented to the Secretariat by special courier to insure integrity of the evidence secured and submitted. |
| 4.2.4 | In addition to the table of comparison that will be prepared by SGS as in 4.1.3, FED should also establish comparability on a per item basis among the article/s as actually examined, the articles as described in the referral sheet and the description in the CRF and the article/s as indicated in the importer's evidence such as price list, previous CRF, discount schedule, previous committee decision, published or established value and the like. For this purpose, a matrix or table of comparison shall also be made showing the comparability of the item/s involved including the unit fair market value, freight, other dutiable charges or the competing tariff headings. |
| 4.2.5 | If everything is in order, the Chief FED shall indorse to the ACS legible copies of the referral sheet, entry and results of examination, other supporting documents, samples, brochures, literatures and the table of comparison for calendaring of cases. |
| 4.2.6 | FED should act on the withdrawal of the approval for tentative release in any of the situations covered in Section III 3.3 of this Order by promptly advising the Secretariat on the withdrawal or cancellation of the approval for tentative release and proceeding against the shipment pursuant to applicable existing rules and regulations. |
| 4.2.7 | In cases where the examiner/appraiser questions the CRF valuation and/or classification, said examiner/appraiser shall refer the matter to the Chief, FED or its equivalent unit specifying the justification/basis for questioning the CRF valuation and/or classification using the form as shown in Annex "J"* |
| The Chief, FED or its equivalent unit shall undertake to accomplish the lower portion of the form and shall forward the same to the Appeals Committee Secretariat. Processing of the dispute shall then proceed as in 4.1.1 but without the importer having to fill up the required referral sheet and only for calendaring purposes. |
4.3 Processing at the Collection Division
| 4.3.1 | Processing of Referrals |
4.3.1.1 The original entry covered by this Order together with the referral sheet and other pertinent attachments must be forwarded to the Chief, Collection Division or his duly designated representative for the determination of the nature of the security and payment of filing fee.
4.3.1.2. The cashier will receive the security required and issue a PROVISIONAL RECEIPT through the CRF-DSS as well as an Official Receipt as proof of payment of filing fee.
4.3.1.3 In addition to existing requirements, in the availment of tentative release, the importer thru its president or general manager as the case may be shall be required to submit a sworn undertaking to the Collection Division
| 4.3.2 | Calendaring of Cases |
4.3.2.1 Cases shall be calendared upon the receipt by the Appeals Committee Secretariat of. the Indorsement from the Chief, FED and the provisional receipt and certified true copy of the Official Receipt issued by the Collection Division for the filing fee. The Official Receipt shall bear the same reference number as that found in the Provisional Receipt.
4.3.2.2 The reference number of each application processed under the CRF-DSS shall serve as the docket number of each appealed cases.
| 4.3.3 | Processing of Decisions |
4.3.3.1 Upon receipt of the decision from the Appeals Committee, the entry and supporting documents shall be retrieved and final assessment be undertaken by FED personnel assigned to the Evaluation Section, Receiving Unit at the Collection Division in compliance to Part IV Section 4.1.2 of CMO 37-94 (Green Lane Clearance Procedure).
4.3.3.2 If the decision calls for additional assessment, the importer will be asked to issue payment for the amount in the additional assessment. An official receipt shall be issued accordingly upon payment and the PDO returned to the importer. Processing shall proceed as in 4.3.3.3 below.
4.3.3.3 If there is no additional assessment or if payment has been, effected thru 4.3.3.2 above, the entry must be forwarded to the Liquidation Division with a notation "CRF DISPUTE RESOLVED".
V.
Operational and Management Information System
5.1 Appended herewith marked Appendix 1* and made an integral part of this Order is an operational and management information system in support of the objectives of this Order.
5.2 Any succeeding changes in the Appendix 1 shall become automatically part of this memo.
5.3 List of Dishonored Checks - The Collection Division shall prepare a list of dishonored checks on PDCs which become stale or dishonored by the banks for any reason whatsoever. To this effect, the Collection Division shall maintain a file of PDCs received and note the ones that have been dishonored.
VI.
Repealing Clause
All orders, rules and regulations inconsistent herewith are deemed repealed and/or modified accordingly.
VII.
Effectivity
This order shall take effect on Jan. 24, 1995.
Adopted: 24 Jan. 1995
Commissioner
* Text available at Office of the National Administrative Register, U.P. Law Complex, Diliman, Quezon City
* Text available at Office of the National Administrative Register, U.P. Law Complex, Diliman, Quezon City.