Home » Across Borders » Misconceptions about RA 9280 (2)

THERE seems to be only two positions on RA 9280 – those for it and those against. Obviously, most licensed customs brokers support the law while those engaged in corporate practice are mostly against it. To date, there are still various conflicting interpretations as to RA 9280 and its implementing rules and regulations (IRR).

This two-part series does not intend to answer all the questions given the varying interpretations of the law. What we intend to do is to clarify the issues and hopefully, provide readers with inputs to help them make their own informed decisions and not simply rely on hearsay and biased views.

Below is a continuation of the frequently asked questions and our suggested answers and opinions (which we hope is as objective as we can be):

What happens when the IRR of RA 9280 takes effect on March 27, 2005? Upon effectivity of the IRR of RA 9280, the public should in general be bound by its provisions and any violation may result in possible administrative complaints (for licensed customs brokers) and/or criminal complaints (for both professional and non-professional).

This is certainly a very sensitive issue. For those who believe that RA 9280 and its IRR expressly prohibit existing corporate practice, there seem to be a lot of ongoing violations of the law. For one, licensed individuals allowing themselves to continue as principal or alternate brokers of corporations may be in violation of the law.

Secondly, customs personnel and officials allowing corporate practice may also be deemed to have violated the law. Of course, there are contrary opinions to the above and this is not as easy and simple as it looks.

The Bureau of Customs (BoC) has already issued numerous memoranda effectively allowing continued operation of corporations pending issuance of its Customs Administrative Order (CAO).

On the other hand, there are reports that the draft CAO expressly prohibits corporations from registering with the BoC as a customs broker. While most companies have already renewed their registration with customs and even as they have prepared their own contingency plans, much is at stake on the issuance of the CAO.

What are the penalties for violating RA 9280 and its rules? Persons violating RA 9280 and its rules may be found liable administratively and criminally. For licensed customs brokers, an administrative case may be filed before the Professional Regulatory Board (PRB) and in case of positive findings, the professional license of the individual may be suspended, revoked or cancelled.

The administrative case may be filed separately from the criminal case to be filed in the regular courts. A criminal case may result in fines and/or imprisonment. For non-licensed individuals deemed to have violated RA 9280 and its rules, a criminal complaint may be filed in court and the penalty may similarly involve fines and/or imprisonment.

What are the new requirements to practice the Customs Broker profession? Under the rules, the PRB is tasked to supervise the customs broker profession and is authorized to issue the certificate of registration and professional identification cards. We should wait for the guidelines to be issued by the PRB on the issuance of the certificate of registration of professional identification cards.

What is important to note is that in the future, licensed individuals will not be allowed to register with BoC without such documents. While the issuance of such documents is a matter of course, it would seem that the PRB, in the exercise of its power of supervision, may not issue the same on valid grounds, for example, if there is an existing administrative or criminal complaint against the individual for violation of RA 9280.

What is the continuing professional education for customs brokers? Many professionals registered with the Professional Regulation Commission (PRC) are required to have continuing professional education as a requirement for being allowed to continue practicing the profession.

For lawyers, the Supreme Court requires all lawyers to finish 36 units/hours of professional education every three years. We expect a similar program for customs brokers to be provided soon. The PRB should be issuing rules and guidelines soon to implement the continuing education program.

What is the role of the Bureau of Customs as far as customs brokers are concerned? The Bureau of Customs obviously retains its administrative power and functions over customs operations and as such, customs brokers practicing their profession can be subject to supervision and control by the BoC in so far as the practice will impact on revenue collection and compliance with customs laws and regulations. For one, the BoC retains its power to conduct audit of customs brokers under RA 9135.

Also, to ensure the protection of revenues and compliance with customs laws, BoC may subject customs brokers to additional rules. For example, customs may require customs brokers to submit periodically additional information and records in regards to importations being cleared with customs. In the future, we foresee both importers and customs brokers being subject to reportorial requirements, similar to the requirements made by BIR.

How much should Customs Brokers charge as Professional Fees? Both RA 9280 and its IRR are silent on the rates for professional fees. However, the code of ethics for customs brokers requires that professional fees be charged on the basis of the standard rates adopted by the PRB.

Accordingly, the PRB has adopted the CAO on customs brokerage charges as the standard for professional fees. The issue here is whether the standard rates are mandatory and whether failure to charge such rates constitutes unethical practice which is a ground for possible revocation or cancellation of the license if an administrative complaint is filed.

While the wording in the code of ethics indicates that the standard rates are mandatory, there are some who are of the opinion that the non-application of rates is not necessarily unethical and as such, the rates should only serve as a guide.

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