- Joint Circular 001.2021 provides supplemental guidelines on the conduct of random field and confirmatory testing under the fuel marking program
- A Field Inspection Unit will be created composed of customs and internal revenue officers to effect the search, seizure and arrest in relation to petroleum products found unmarked, adulterated or diluted
- Petroleum products found without the official fuel marker or do not contain the required level of official fuel marker will be subject to duties and taxes
Supplemental guidelines on the conduct of random field and confirmatory testing under the government’s fuel marking program has been issued.
The guidelines are contained in Joint Circular (JC) No. 001.2021 dated February 1, which covers gasoline, diesel and kerosene found in warehouses, storage tanks, gas stations and other retail outlets, and in such other properties or equipment, including mechanisms of transportation, of persons engaged in the sale, delivery, trading, transportation, distribution, or importation of fuel for domestic market.
Signed by Finance Secretary Carlos Dominguez III, Customs commissioner Rey Leonardo Guerrero, and Internal revenue commissioner Caesar Dulay, JC 001.2021 takes effect 15 days after its publication in a newspaper of general circulation.
Random field and confirmatory testing is part of the government’s fuel marking program under the Tax Reform for Acceleration and Inclusion (TRAIN) Law that took effect in 2018. Fuel marking aims to curb oil smuggling and plug revenue losses arising from illegal importation or misdeclaration of petroleum products.
The Department of Finance earlier said it expects the fuel marking program to be fully operational nationwide by the first quarter of this year.
Under JC 001.2021, a Field Inspection Unit (FIU) will be created composed of officers from the Bureau of Customs and Bureau of Internal Revenue deputized to perform necessary functions to effect the search, seizure and arrest in relation to petroleum products found to be unmarked, adulterated or diluted.
Aside from FIU officers, other parties involved in field testing include the fuel marking service provider–currently the joint venture of Swiss-based SICPA SA and SGS Philippines, Inc.–as well as the owner and his representative.
The owner refers to any person, whether natural or juridical who refines/manufactures/processes and/or imports/exports and stores, distributes and sells petroleum products. Other parties may include dealers, haulers and other entities engaged in the downstream oil industry.
Field testing should be conducted in locations where fuel are transported, sold or stored, regardless if the facility is open to the public or for use of a limited group or person.
A mission order should be issued to the FIU authorizing the conduct of field testing in locations identified in the Field Testing Plan, which identifies the area for testing and the designated mobile laboratory unit (MLU). The MLU is a mobile testing laboratory operated by the fuel marking service provider that conducts the random field testing.
At all times, the appropriate protocol should be observed by the FIU and fuel marking service provider when conducting field testing activities.
Petroleum products found without the official fuel marker or do not contain the required level of official fuel marker, will be subject to duties and taxes, inclusive of fines and penalties, without prejudice to confiscation and forfeiture of such unmarked or diluted fuel and the filing of appropriate criminal case.
Pending assessment and payment of the duties and taxes due including penalty, the FIU should impound the non-compliant fuel on site in accordance with procedures under JC 001.2021.
All offenses relating to the fuel marking program will, in addition to the penalties imposed under Title X of the National Internal Revenue Code (NIRC), as amended; Section 1401 of the Customs Modernization and Tariff Act, and other relevant laws, be punishable under Section 265-A of the NIRC, as amended.
Seized or impounded unmarked, diluted and adulterated fuel will be disposed of in accordance with existing laws, rules and regulations of BOC or BIR.
As transitory provisions under JC 001.2021, within reasonable time from the start of the fuel marking program, field testing should be done to determine the market saturation level.
The service provider should identify the location to be covered by the transitory field testing which should include storage tanks, depots and terminal facilities.
During the period of community quarantine brought about by the COVID-19 pandemic, implementing agencies as well as the service provider should ensure personnel dispatched for every field testing complies with government protocols.
From September 2019 to January 6, 2021, the government has marked 17.73 billion liters of fuel under the fuel marking program.
From September 2019 to January 4, 2021, BOC has collected P149.36 billion of duties and taxes while BIR took in excise taxes of P23.94 billion from December 2019 up to December 28, 2020. – Roumina Pablo