Home » Customs & Trade » BOC to appeal decision on CAO 3-2006

THE Bureau of Customs (BOC) is set to appeal the decision of the lower court which voided Customs Administrative Order (CAO) 3-2006.

CAO 3-2006 operationalizes Republic Act 9280 or the Customs Brokers Act of 2004 at the BOC.

In a notice filed with Branch 8 of the Manila Regional Trial Court (RTC) that handed down the decision on civil case 06-115029, assistant solicitor general Amparo Cabotaje-Tang said the BOC will try to seek the help of the CA to reverse the decision.

According to the notice, the Office of the Solicitor General-the agency that handles all lawsuits filed against the government-claimed that the decision of the lower court is also contrary to law, evidence and prevailing jurisprudence.

The decision of the BOC to appeal its case before the Court of Appeals signals a long battle to determine the legality of CAO 3-2006, which is the basis of an amendment approved on September 2, that allows customs brokerage houses and freight forwarding firms to transact with the BOC.

Earlier this month, the Manila RTC voided 3-2006 and directed the BOC to desist from implementing the CAO and permanently maintain the status quo order it issued earlier in the practice of the customs brokerage profession.

Judge Felixberto Olalia, Jr. in a 22-page decision declared CAO 3-2006 invalid and in contravention with RA 9280.

"This court hereby declares CAO 3-2006 invalid for being issued without any authority and in contravention with RA 9280. The status quo order previously issued by this Court is made permanent. The Commissioner of Customs is hereby ordered to desist from enforcing CAO 3-2006," the court stressed in its decision.

The court finds merit in the contention of the petitioner that CAO 3-2006 was issued in violation of the Administrative Code. According to the court, an ‘order’ is supposed to be directed to particular office, officials, or employees, concerning specific matters including assignment, detail, and transfer of personnel, for observance or compliance by all concerned.

"Consequently, CAO 3-2006 which governs the regulations of the practice of customs brokers does not pertain to offices or employees in the government. As such, what should have been issued by the Commissioner of Customs is a ‘circular’ which prescribes policies, rules and regulations and procedures promulgated pursuant to lawÉ Nonetheless, even if CAO 3-2006 was issued as a ‘circular’ it would not validate the issuance since it was issued not only to supplement the law but in effect, it directly contravenes the law," the decision revealed.

The same court also ruled there is no need for customs brokers to secure accreditation from the BOC as the Professional Regulation Commission’s Certificate and the Professional Regulatory Commission License are enough.

"These documents are given for them to exercise or practice their profession and give them authority to sign documents pertaining to the exercise of their profession. Hence there is no need to secure a license from a particular port of the BOC, a consequence of which limits the scope of the practice of the profession, which is national in the first place," Judge Olalia explained in his decision.

"CAO 3-2006 provides for the grant, renewal, denial, revocation, and suspension of the accreditation. Said procedures would in effect curtail the rights conferred upon by RA 9280 to licenses customs brokers. Hence, the requirement of accreditation of accreditation clearly amounts to a licensing requirement prohibited by law," he added.

Airlift Asia Customs Brokerage in May filed a petition before the court questioning the CAO claiming it empowers the Customs commissioner to issue another license for the practice of customs brokerage inside the customs house – a situation which it said has been expressly repealed by RA 9280. The law, it argued, lodged all powers for the licensing of customs brokerage with the Professional Regulatory Board of Customs Brokers.

The petitioner also claimed that the basis for the issuance of CAO 3-2006 – Sections 602 to 608 of the Tariff and Customs Code of the Philippines (TCCP) – refers to general duties and powers of commissioner such as assessment of revenues, prevention of smuggling, issuance of clearance of vessels coming in and out of the pier under the jurisdiction of the BOC, among others. Nothing in the TCCP sections expressly empowers the BOC to regulate the practice of customs brokerage, it said. The petitioner claimed the issue could affect the company’s 20 or so employees and 156 clients. If the CAO is fully enforced, the petitioner said it would close down.

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