Home » Across Borders » Proposed Changes to RA 9280 and Their Implications
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IN the coming months (or by next year), we expect possible amendments to RA 9280 either by way of the approval of the pending legislation in Congress or upon adoption and implementation of the Revised Kyoto Convention (RKC). In relation to RKC and other international practices, below is a discussion on the standards and best practices on the customs declaration process and how this relates to the customs broker practice as defined under RA 9280 and the proposed amendments.

What is a Declarant. A declarant is generally the owner of the goods and is responsible for ensuring accurate and complete declaration in the import/export entry. The declarant will generally be liable for any false declaration committed in the import/export entry. If the owner is a corporation or partnership, the declarant should be a person authorized by the corporation, normally through a special power of attorney. Another term commonly used for a declarant is importer/exporter-of-record. In the US, an importer may hire a customs broker (individual, partnership or corporation) and when authorized, such customs broker may prepare and file the entry declaration as the Òimporter-of-record. US Customs does not allow anyone to sign the entry declarations, whether manually or electronically, except the importer or a duly authorized customs broker.

In the Philippines, only the importer or the customs broker may be the declarant as provided under Sec. 1301, TCCP. Originally, three persons may, in the alternative, enter the imported article into the customhouse at the port of entry: (1) importer; (2) customs broker; and (3) agent or attorney-in-fact. In case the import entry is signed by the customs broker or agent/attorney-in-fact, the same section requires that the importer is required to declare under oath and under the penalties of falsification or perjury that the declarations and statements contained in the entry are true and correct. With the enactment of RA 9280, the interpretation now is that an agent may no longer be allowed to sign the import declaration.

Who May Transact with Customs. International best practices provided in the RKC allow importers to assign any third party, not necessarily a customs broker, to represent him in transacting with customs. While only importers and customs brokers are generally allowed to be a declarant in the import/export declaration, any third party may generally represent the importer in other transactions with customs. In most countries, however, certain types of “customs businesses or transactions” are limited only to the importer or a customs broker. This limitation usually applies when the nature of the transaction is highly regulated by the customs authority concerned.

Under RA 9280, only customs brokers may be allowed to transact with customs in behalf of importers and with regard to import/export declarations entered with customs. Also, present customs rules in the Philippines provide that the handling and representation of seizure cases is limited to lawyers and a customs broker is not allowed to handle such cases.

Proposed Legislative Amendments. The House of Representatives and the Senate have accordingly approved on third reading the proposed amendments to RA 9280. The proposed amendments will now be submitted to a bicameral committee to resolve the conflicting provisions. Once approved by the bicameral committee, the final version shall be submitted for ratification by both houses, hopefully sometime June of this year.

House Bill No. 6063 specifically amends Section 29 of RA 9280 by changing the section sub-title “Prohibition Against Corporate Practice” to “Admission to Professional Practice” and by deleting the phrase “No firm, company or association may be registered or licensed as such for the practice of customs broker profession”. Other than the proposed amendments to Section 29, the house bill does not provide for other amendments. Senate Bill No. 2597 is likewise limited to amending Section 29 by changing the section sub-title to “Admission to Professional Practice” and by providing the phrase “Nothing in this shall prohibit a corporation from hiring the services of an in-house customs broker for purposes of accreditation by the Bureau of Customs and facilitation of activities mentioned in Sec. 6.”

Implication of the Amendments. While HB 6063 may seem to have implied removal of the prohibition on corporate practice by deleting the last paragraph of Section 29 and by changing the sub-title, this interpretation is not exactly correct as Section 28 of RA 9280 (which has not been amended) expressly provides that only an individual customs broker (one who has passed the licensure examination) may practice the profession and advertise as a customs broker. HB 6063, as it is, did not expressly remove the prohibition on corporate practice considering that other provisions of RA 9280 still provide for such prohibition, both expressly and by implication.

SB 2597, on the other hand, retained the prohibition on corporate practice (as contained in the last sentence of Section 29) but provided that customs brokers may be hired by corporations to perform customs broker services. Depending on how this will be interpreted in the future, the concept may be akin to lawyers being hired as in-house counsel to provide legal services or in the alternative, to doctors providing health services to health institutions or hospitals. In the first example, the lawyer is an employee while in the second, the doctor is an independent professional.

Unless a consolidated version that is totally different from the proposed amendments comes out in the bicameral committee (which we doubt), the proposed amendments to RA 9280 may have failed to address many of the issues raised by those in the trading industry. For one, the requirement that all import and export entries should be signed only by a customs broker provided under Section 27 has been retained. This requirement is contrary to international best practices which allow importers/exporters the prerogative to be the declarant themselves without any assistance from a customs broker.

Second, it is not provided in the amendments that a third party other than a customs broker may be allowed to represent the importers when transacting with customs. In other words, while Section 6 of RA 9280 provides that the preparation and processing of import/export entries is deemed as a practice of the customs broker profession, it is not provided that corporate entities or its employees are allowed to perform such functions (e.g. processing of entries with customs) or that customs may issue rules allowing employees of corporations to perform some of the functions of the customs broker.

Unresolved Issues. While there is a strong possibility that the proposed amendment to RA 9280 may finally be approved this year, we do not expect the situation to substantially change and we foresee the trading community to remain confused as to what the law exactly allows or prohibits. From the very start, any proposed amendment should have properly defined certain concepts (e.g. what is a declarant, what is a customs transaction, who can transact with customs, what is the scope of customs broker professional practice) which is really the root cause of all the confusion. Additionally, the proposed amendment should delineate the jurisdiction of customs and PRBCB in regards to the practice of the customs broker profession and professional transactions with customs. Failing that, concerned government agencies will remain at odds on how to implement the law and contending parties will continue to debate and argue (and file suit and counter suit) on what the law exactly allows or prohibits.

The author is an international trade and customs consultant, and a licensed customs broker. He is a lecturer on logistics, indirect tax, customs and supply chain. Please contact agatonuvero@yahoo.com for your comments.

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