The rules implementing clearance procedures for air express shipments and the guidelines for accrediting air express cargo operators (AECO) have been released
Customs Memorandum Order (CMO) No. 09-2021 implements Customs Administrative Order (CAO) No. 05-2020, which provides procedures for the transport, documentation, and clearance of express shipments in all Philippine airports
AECOs need to be accredited with BOC to handle air express shipments
The Bureau of Customs (BOC) has issued rules implementing clearance procedures for air express shipments and the guidelines for accrediting air express cargo operators (AECO).
Customs Memorandum Order (CMO) No. 09-2021 implements Customs Administrative Order (CAO) No. 05-2020, which provides procedures for the transport, documentation, and clearance of express shipments in all Philippine airports under Section 439 (Express shipment) and other related provisions of the Customs Modernization and Tariff Act (CMTA).
According to former BOC deputy commissioner Atty. Agaton Teodoro Uvero’s book Understanding International Trade, Tariff and Customs, Section 439 is the provision that provides clearer guidance on the customs treatment of express shipments.
AECOs need to be accredited with BOC to avail themselves of the privilege of handling air express shipments. AECOs, according to CMO 09-2021, are companies that provide and arrange fast and rapid transport and delivery of express shipments, by order and in the interest of shippers or consignors. AECOs are either a direct common carrier or an indirect air carrier, and as such issue their own air waybill (AWB) to shippers or consignors of shipments under their solicitation.
Under the new order, BOC will change the current nature of accreditation from freight forwarder to AECO. If the the AECO is currently on active status, the change will be done automatically by BOC’s Account Management Office (AMO); the inactive AECO must comply with requirements for accreditation.
BOC will also require all AECOs to be accredited as a customs facility and warehouse (CFW) operator. If an AECO is operating a customs bonded warehouse (CBW) under the old regime, BOC will approve the conversion of accreditation from CBW to CFW.
BOC may allow the AECO to use and operate in an existing CBW facility if it presents proof of an existing contract with the CBW. The existing CBW should also be converted into a CFW.
AECOs are also required to provide an updated accreditation from the Civil Aeronautics Board (CAB). If not accredited, an AECO cannot avail of a simplified clearance procedure until it has secured the CAB accreditation, CMO 09-2021 states.
Affidavit of undertaking required
BOC will also require an affidavit of undertaking signed by the highest officer or authorized officer of the AECO, duly supported with a board resolution, as proof the AECO complies with the following:
- A member of an existing international organization, such as Conference of Asia Pacific Express Carriers
- Has existing global and regional hubs in handling of express shipments
- Has a dedicated air carrier for its use as an air express operator. BOC said it will also recognize other commercial flights being used by the AECO to augment their network to meet time-sensitive delivery commitments, subject to prior approval by the Customs commissioner
- Has an existing integrated end-to-end tracking system that provides real-time update to its clients.
BOC will also require from the AECO an IT system that can interface with the bureau’s automated system, provided the AECO follows the requirements to be determined by BOC’s Management Information System and Technology Group.
Applications for an AECO should be acted upon by the AMO within seven working days from receipt of complete documentary requirements and after the inspection of the AECO’s IT systems.
A customs office will be established in all international airports where AECOs have established offices or hubs. The customs office should be located within the facility of the AECO, and be provided the necessary office and IT equipment, furniture, and other implements.
The AECO should also provide transport service to Customs personnel from the main office of the port to the facility or office of the AECO for the personnel’s safety and swift delivery of service. However, transport allowance to the Customs personnel assigned to the customs office may also be provided instead. Operating hours will be determined by the AECO.
Overtime services will be provided by BOC as needed, subject to payment of service fees in accordance with relevant provision of the CMTA.
In case of low-value, dutiable and/or taxable express shipments, the AECO should deposit and maintain in the accredited agent banks not less than P5 million specifically to guaranty immediate payment by the bank upon demand by BOC. The AECO should increase the security deposit if the duties, taxes, and other charges due on the shipments exceed P5 million. Otherwise, the district collector will not allow shipments not covered by the security deposit to be released.
If the AECO defaults on the payment of the assessed customs duties, taxes, and other charges due on shipments that were released under CMO 09-2021, BOC will deduct these charges from the security deposit.
The security deposit will likewise cover mis-sorted or misrouted shipments being returned to the shipper. If the AECO fails to show proof of landing or evidence of re-exportation or the shipment was not re-exported within 24 hours from arrival, the amount of duties, taxes, and other charges which should have been collected will be deducted from the security deposit as penalty.
Express shipments will be cleared based on their category, which are:
- Correspondence and documents
- De minimis or low-value, non-dutiable shipments
- Low-value, dutiable and/or taxable shipments
- High-value shipments
Cargo manifest submission
The AECO should electronically submitted in advance the true and complete copy of the electronic inward foreign cargo manifest (e-IFCM) at least one hour before arrival of aircraft coming from Asia and at least four hours before arrival of aircraft coming from other continents.
The electronic consolidated inward foreign cargo manifest (e-CIFCM), on the other hand, should be submitted one hour after arrival of the aircraft if the e-IFCM was submitted within the prescribed period.
If the e-IFCM was submitted late, the e-CIFCM will be accepted without penalty if submitted in the customs systems not exceeding 24 hours after the e-CIFCM is registered with the Office of the Deputy Collector for Operations. This same privilege will apply in case the e-IFCMs are not validated on time, such as due to system errors, CAO 05-2020 states.
Cargoes not listed in the IFCM will be duly covered by a supplemental manifest which will be submitted within six hours upon arrival of the aircraft.
Supplemental IFCM will be submitted in hard copies and electronic form within the prescribed period under CAO 05-2020. Otherwise, the shipments listed in the supplemental IFCM will be considered as unmanifested and subject to seizure proceedings.
Unmanifested goods will be subject to penalties under the applicable customs order.
All shipments should undergo non-intrusive scanning prior to clearance.
In all cases, the rules and regulations for regulated, restricted, and prohibited goods will apply.
All export shipments, meanwhile, should be covered by an export declaration electronically lodged in BOC’s automated system. All export manifests must be submitted to BOC within 24 hours after the actual departure of the aircraft.
For transshipment, the transfer from aircraft to the designated CFW and from the CFW to the aircraft for loading of all express shipments destined for other countries will be supervised by a customs officer, as will be other safeguard measures meant to prevent diversion of goods to the domestic market or commingling with other goods destined to the Philippines.
Mis-sorted or misrouted shipments may be returned to the shipper without payment of duties, taxes, and other charges under certain circumstances enumerated in CMO 09-2021.
Until it can establish a facility and implement an information and communications technology-enabled system for advance lodgment and clearance, and clearance and monitoring, the AECO should implement an automated system that will monitor the movement of shipments and can receive and process e-IFM, electronic transshipment foreign cargo manifest, e-CIFCM, and electronic outward foreign cargo manifest.
And until BOC develops and implements a new customs processing system, the agency will allow, in the meantime, the AECO to lodge and clear the express shipments using the existing customs clearance procedure. – Roumina Pablo