BOC issues rules on accreditation of VASPs

• Customs Administrative Order (CAO) No. 14-2020 provides new guidelines on accreditation and supervision of value-added service providers (VASP) providing BOC front-end ICT services

• A VASP accreditation committee will be constituted to oversee VASPs

• CAO 14-2020 implements the Customs Modernization and Tariff Act’s mandate that customs should accept electronic documents as an alternative to paper-based documentary requirements

The Bureau of Customs (BOC) has issued new guidelines on the accreditation and supervision of value-added service providers (VASP) providing front-end information and communications technology (ICT) services to the agency.

Customs Administrative Order (CAO) 14-2020 establishes the administrative and operational guidelines for the accreditation and supervision of VASPs.

Accreditation of VASPs is meant to allow BOC to “harness the technical expertise and maximize the participation of the private sector” in its delivery of front-end customs ICT services, the CAO states.

CAO 14-2020, signed by Finance Secretary Carlos Dominguez III on October 20 and Customs Commissioner Rey Leonardo Guerrero on October 8, also implements Section 109 of the Customs Modernization and Tariff Act (CMTA).

The section states that BOC should utilize ICT to enhance customs control and support a cost-effective, efficient, and world-class paperless customs operations.

According to the book Understanding International Trade, Tariff and Customs by former customs deputy commissioner Atty. Agaton Teodoro Uvero, Section 109 “legally mandates customs to accept electronic documents (including permits, licenses and certificates) and to recognize their legal effect, validity and enforceability as an alternative to paper-based documentary requirements.”

Under CAO 14-2020, electronic data transmitted by VASPs for purposes of customs procedures, such as documents, permits, licenses or certificates, will be acceptable and will have the legal effect, validity or enforceability as any other document or legal writing.

Once the VASP complies with the requirements, BOC shall recognize the authenticity and reliability of electronic documents by transmitting acceptance or approval of these documents through electronic data messages or electronic documents.

VASPs should provide technical solutions to BOC’s electronic customs system; provide technical assistance nationwide; provide support to BOC in prosecuting violations of tariff and customs laws; receive and transmit electronic data to concerned BOC offices and stakeholders; and act on the responses and messages returned by the BOC gateway/system, among others.

A VASP Accreditation Committee that will accredit, supervise, and control VASPs will be constituted by the Customs commissioner through a separate customs special order.

The accreditation of VASPs will be valid for a period of three years and may be renewed after evaluation of their performance as measured by the service level agreement (SLA) and their continued compliance with the eligibility requirements. The renewed accreditation will be valid for a period of one year.

BOC may carry out further accreditation process for new applicants after three years of operation of the initially accredited VASP/s.

BOC may pre-terminate the accreditation of any VASP on the following grounds:

• Violation of the provisions of CAO 14-2020 and related rules and regulations, including the SLA and non-disclosure agreement
• Violation of the CMTA, Data Privacy Act, Philippine Competition Act, and other related laws
• Actions inimical to the security and integrity of BOC operations
• Other grounds as provided under Section 14 (notification of Customs systems update) of CAO 14-2020 or as may be determined by BOC

VASPs unable to meet their SLA targets for service availability, incident response time, incident resolution time, and root cause analysis will face penalties stated in the SLA. BOC may also revoke or pre-terminate their accreditation.

BOC may collect from the VASP a service fee for monitoring and supervision of the VASP system. The supervision fee is normally equivalent to 10% of the fees collected in accordance with the published rate.

BOC should also notify VASPs on upcoming changes in customs procedures to enable VASPs to tweak their systems to comply with the new procedural and data requirements. BOC should also notify the VASPs in case of pre-termination of the accreditation due to the VASP system having become obsolete or incompatible with the new customs processing system. – Roumina Pablo