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The Bureau of Customs amended guidelines on the establishment, operation, supervision, and control of customs bonded warehouses
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Customs Administrative Order No. 01-2022 made several changes to the types of CBWs, particularly those in the non-manufacturing sector
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The order reclassifies all public customs bonded warehouses, considered previously as non-manufacturing customs bonded warehouse, as customs facilities and warehouses
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CAO 01-2022 also made changes on penalties imposed for violations, including diversion of bonded goods and unauthorized withdrawal or transfer of goods to another CBW or free zone
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The authority to operate a CBW remains valid for three years
The Bureau of Customs (BOC) recently issued amended guidelines on the establishment, operation, supervision, and control of customs bonded warehouses (CBWs).
Customs Administrative Order (CAO) No. 01-2022 covers all types of CBWs listed in the Customs Modernization and Tariff Act (CMTA), as well as those to be created by the secretary of finance at the recommendation of the Customs commissioner. The order was signed by Customs Commissioner Rey Leonardo Guerrero and Finance Secretary Carlos Dominguez III on February 3.
CAO 01-2022 repeals CAO 13-2019 and all similar guidelines for CBWs issued previously by BOC.
READ: BOC unveils new rules on operation of CBWs
Under CAO 01-2022, CBWs are warehouses authorized or licensed by BOC to import, receive and store — without payment of duties and taxes and under bond — goods, raw materials, accessories and packing materials either for manufacture into finished products for export, or storage for the account of accredited exporter/client.
When business of the port and trade requires such facilities, the district collector, subject to the approval of the Customs commissioner, will designate and establish customs warehouses for storage of imported goods or for other special purposes.
CAO 01-2022 states that a CBW includes surrounding premises within its perimeter fence per approved application, rooms, compartments and other areas necessary and exclusively used for storing, processing, repacking, and manufacturing imported raw materials and the finished products, by-products, wastages and rejects incidental to such activities as applied for and approved by BOC.
No other establishment will be allowed within the premises without BOC approval, the order stated.
BOC is responsible for the licensing, supervision and control of all CBWs, considered as extension of customs premises insofar as the dutiable goods stored. The supervision and control of CBWs extend to the warehouse and facilities of duly authorized members, client end-users, client exporters and sub-contractors of CBWs.
BOC is not liable for any loss or damage on goods stored in any CBW.
The CBWs may be classified as either manufacturing or nonmanufacturing.
A manufacturing customs bonded warehouse (MCBW) is one established for the manufacture of products using raw materials or components that are imported duty- and tax-free on condition the finished products are exported within the prescribed period or are withdrawn for domestic consumption upon payment of duties and taxes.
CAO 01-2022 states that raw materials entered for consumption should not exceed 30% of the volume of raw materials entered for warehousing. Withdrawal of consumption beyond 30% may be allowed in meritorious circumstances, such as cancelled orders, closure of CBW, or cessation of operations due to a state of calamity.
MCBWs may be miscellaneous manufacturing bonded warehouses (MMBW), garments and textiles manufacturing bonded warehouses (GTMBWs), customs common bonded warehouses (CCBWs) and industry-specific bonded warehouses (ICBWs).
A free zone locator/enterprise may be accredited by BOC as a subcontractor of an MMBW, GTMBW, or of an accredited member of a CCBW.
A non-manufacturing customs bonded warehouse (NCBW) is one where goods are stored duty- and tax-free on condition that eventual withdrawal of the goods is for consumption and they should only be made within the prescribed period upon payment of the corresponding duties, taxes and other charges.
CAO 01-2022 said an example of an NCBW is a private customs bonded warehouse, which is authorized to import, receive, and store goods for their own accounts intended for domestic consumption.
CAO 01-2022 also reclassifies all existing public customs bonded warehouses, considered previously as NCBWs, as customs facilities and warehouses (CFW) in compliance with CAO 09-2019.
CFWs under CAO 09-2019 are facilities for temporary storage of goods established and authorized by BOC.
The Finance secretary may, upon recommendation by the Customs commissioner, create or dissolve certain types of warehouses in consultation with the National Economic and Development Authority and Department of Trade and Industry based on prevailing economic circumstances.
The authority to operate a CBW, including warehouse extensions and additional facilities, remains valid for three years upon approval of the application to establish the facility, as stated in the Certificate of Authority to Operate.
If the lease of the contract submitted during the application is less than three years, the validity of the authority to operate will be coterminous with the lease contract unless a new one with a longer period is submitted.
The application for renewal of authority to operate should be filed not later than 90 days but not earlier than 120 days before its expiration.
Goods entered for warehousing may remain in a CBW for up to one year from the time they arrive at the warehouse. However, the commissioner may, in consultation with the secretary of trade and industry, extend the storage period beyond one year for particular bonded goods for manufacturing and intended for export, subject to the approval of the secretary of finance. This is to allow time for these bonded goods to be processed into finished products, as they require a longer period based on industry standards and practices.
For perishable goods, the storage period is three months from arrival at the warehouse, extendable for valid reasons and upon written request, for another three months.
Imported goods should be withdrawn from CBWs when the necessary withdrawal permit has been filed together with required documents. Goods not withdrawn after the prescribed period has expired will be deemed abandoned, unless the CBW operator expressly abandons them.
Bonded raw materials withdrawn within the prescribed storage period should be manufactured and exported within one year from their arrival at the CBW. Goods withdrawn within the prescribed period but not re-exported within that period may request for re-exportation but will be subject to applicable penalties.
BOC will impose an annual supervision fee, service fee, and other charges on operations of CBWs, including extensions and additional facilities, if any.
BOC will establish a Compliance Rating System that will be used to measure and assess the compliance and performance levels of all CBWs, especially with regard to applicable laws, rules, and regulations and other performance factors in consultation with stakeholders. The system will also be used by BOC as a risk management mechanism in evaluating any application, or be used as basis in any action which may be taken by the agency against a CBW.
CAO 01-2022 also made changes on penalties imposed for violations, including:
- diversion of bonded goods;
- unauthorized withdrawal or transfer of goods to another CBW or free zone;
- unauthorized relocation of CBW;
- unauthorized changes in the CBW lay-out; unauthorized structural changes of the CBW and/or of its extension warehouse;
- late filing of application for renewal of the authority to operate;
- late exportation;
- late submission of documents for liquidation of goods declaration for warehousing; and
- late submission of documents for cancellation of warehousing bonds.
The penalties, fines, or surcharges will be applied on erring importers or warehouse operators without prejudice to other actions BOC may file against the importer and surety company for breach of bond, or take action on the importation pursuant to the CMTA.
The penalties are without prejudice either to criminal and other liabilities imposed under the CMTA and other laws.
Under CAO 01-2022, BOC may have all existing CBWs re-evaluated, reclassified, and reorganized to ensure compliance with the requirements and conditions of the CAO.
CBWs already existing and authorized to operate prior to effectivity of the CAO are required to comply with all administrative and reporting requirements set forth in CAO 01-2022.
Until such time that a new customs memorandum order implementing CAO 01-2022 is issued, provisions of existing CMOs not inconsistent with the new CAO will remain in effect. – Roumina Pablo
