Draft order activating PH advance ruling system for I/E goods issued

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ID-100135641The draft administrative order operationalizing provisions on advance rulings under the Philippine Customs Modernization and Tariff Act (CMTA) has been released for stakeholders’ review.

The Department of Finance (DOF) and Bureau of Customs (BOC)-proposed Customs Administrative Order (CAO) establishes an advance ruling system for valuation, rules of origin (ROO), and other matters related to importing or exporting goods. The CAO is pursuant to Section 113 and Sections 1100 to 1104 of Republic Act No. 10863 or the CMTA.

Section 113 covers decision and ruling, while Sections 1100 to 1104 focus on classification ruling, valuation ruling, ruling on the rules of origin, conditions for application and effect of advance rulings, and administrative and judicial appeals.

Advance ruling—an official written and binding ruling issued by BOC that provides the requesting person with an assessment of origin, or treatment to be applied on a certain element of customs value, or other matters related to the importation or exportation of goods under customs jurisdiction, prior to an import or export transaction for a specified period—is now part of the law.

DOF and BOC said the proposed rules on advance ruling incorporate the commitments of the Philippines to the World Trade Organization’s Agreement on Trade Facilitation, the Revised Kyoto Convention, the ASEAN Trade in Goods Agreement (ATIGA), and other relevant trade agreements entered into by the Philippines.

The CAO aims to provide rulings on the origin, valuation methodology, and other matters before the goods are imported or exported, “in order to add certainty and predictability to international trade and (help) commercial importers or exporters to make informed business decisions based on legally binding rules.”

The advance ruling system will also help ensure that customs policies, rules, and regulations on customs valuation, rules of origin, and other customs matters covered by this CAO are applied with uniformity and consistency.

Under the draft CAO, entities allowed to request for advance ruling are an exporter of a foreign country or its authorized agent for ROO, or an importer or exporter or its authorized agent for valuation methodology and other matters related to the importation or exportation of goods.

“To ensure that an Advance Ruling application does not relate to any ongoing trade transaction, an application for an Advance Ruling should be submitted to the Bureau no later than 90 calendar days before the date of the importation in question,” the draft order states.

Once the application and necessary documents are filed, BOC will issue its advance ruling no later than 30 calendar days of receipt of the request, or of additional documents or information.

BOC may decline or postpone an advance ruling if the applicant fails to provide any additional information required within the specified time period. The agency may also do so in instances identified in the proposed CAO, such as when the issue involves a matter that is before the courts or is the subject of an administrative review.

To implement the advance ruling system, BOC is set to create, thorough the CAO, a Committee on Advance Ruling on Valuation and Rules of Origin (CARVROO), which will have the authority to issue advance rulings.

A Customs Special Order is also set to be issued to define the organization and composition of the CARVROO.

The Customs commissioner may also promulgate rules and regulations set out in a CMO to effectively implement the provisions of the signed and approved CAO.

The draft CAO on advance ruling was dropped as scheduled on September 1, and stakeholders are invited to submit position papers on the subject until September 8. A public consultation will also be held on that day.

DOF and BOC have selected 14 priority provisions implementing the CMTA to undergo weekly public consultations until December. The draft CAO on advance ruling is the second administrative order to be released for review. – Roumina Pablo

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