BOC rules on setting up CFWs now in effect

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BOC rules on setting up CFWs now in effect
CMO 18-2022 sets guidelines on the establishment, operation, supervision, and control of customs facilities and warehouses under the Customs Modernization and Tariff Act. Image by marcinjozwiak from Pixabay
  • The Bureau of Customs’ rules on the establishment, supervision, operation, and control of customs facilities and warehouses (CFW) are now in place
  • Customs Memorandum Order No. 18-2022 took effect on July 8, implementing CAO 09-2019, which sets the guidelines on the establishment of all types of CFWs
  • Operators of terminal facilities with existing contracts granted by the Philippine Ports Authority and other port authority will be authorized to operate as a CFW

The Bureau of Customs (BOC) has issued rules for the establishment, supervision, operation, and control of customs facilities and warehouses (CFW).

Customs Memorandum Order No. 18-2022, which took effect on July 8, applies to all types of CFWs, including terminal facilities, off-dock/off-terminal CFWs, container yards/depots, other types of CFWs, and those which may be created by the finance secretary upon recommendation of the customs commissioner.

CMO 18-2022 implements Customs Administrative Order No. 09-2019, which sets guidelines on the establishment, operation, supervision, and control of CFWs under the Customs Modernization and Tariff Act. It aims to protect government revenues and the imported goods stored in CFWs, and preventing customs fraud.

CFWs are facilities established and authorized by BOC for temporary storage of goods. These include container yards (CY), container freight stations (CFS), seaport temporary storage warehouses, airport temporary storage warehouses, and other premises for customs purposes.

Other types of CFWs are terminal facilities, off-dock CFW, off-terminal CFW, and inland container depots.

When the business of the port and trade requires such facilities, the district collector, subject to the approval of the customs commissioner, should designate and establish CFWs for the storage and/or clearance of imported goods or for other special purposes.

Operators of terminal facilities with existing contracts granted by the Philippine Ports Authority and other port authority will be authorized to operate as a CFW, provided they comply with the additional requirements and conditions as may be imposed by BOC.

All CFWs, including their expansion, extensions, and additional facilities, will be considered part of customs premises subject to the supervision and control of BOC, which shall impose such conditions and other regulations as may be deemed necessary for the protection of government revenue, and of the goods stored therein.

BOC will be responsible for the issuance of an Authority to Operate a CFW, including the imposition of different sets of requirements for their establishment, maintenance, and operation, setting forth the rights and obligations of operators, and the penalties and sanctions for violation of these rules.

Only authorized CFW operators are allowed to handle and store imported goods that are immediately discharged from arriving aircraft, vessels, and other means of operational transport.

The Authority to Operate a CFW is non-transferable. In case of a merger, sale, assignment, or other modes of transfer, the surviving entity which is not the grantee of an Authority to Operate issued by BOC must apply for a new Authority.

The Authority to Operate an off-dock or off-terminal CFW, including additional facilities, will be valid for three years counting from the date of approval of the application. For renewal, the CFW operator should file the application at least 90 days before the expiration of the Authority to Operate.

The finance secretary may, upon the recommendation of the customs commissioner, create or dissolve certain types of warehouses subject to consultation with the National Economic and Development Authority and Department of Trade and Industry based on prevailing economic circumstances.

To ensure compliance with requirements and conditions of CAO 09-2019, all existing public bonded customs warehouses are reclassified as CFWs without prejudice to all the rights, conditions, and obligations already acquired or vested prior to the effectivity of CMO 18-2022.

The BOC district collector, “in pursuit of its supervisory and control functions over customs premises”, may assign customs personnel at CFWs to monitor and implement control measures for customs purposes, in accordance with its existing organizational structure and staffing pattern.

Pending the issuance of a new CAO providing the rates to be charged by CFWs established under CMO 18-2022, the rates as provided under existing regulations will continue to be in force and effect.

CMO 18-2022 also provides that the incidental or pass-on charges for expenses incurred by off-dock/off-terminal CFW operators that may be collected as reimbursements. This is pursuant to CMO 07-2022, issued early this year.

BOC’s Port Operations Coordinating Division (POCD) should ensure that rules and regulations are properly implemented through effective coordination, evaluation, supervision, and monitoring of CFW operations and activities.

The POCD will also establish a compliance rating system, which will be used to measure and assess the compliance and performance levels of all CFWs, especially with regards to applicable laws, rules and regulations.

The system will be utilized as a risk management mechanism in its evaluation of any application or used as a basis in any action that may be taken by BOC for or against a CFW. – Roumina Pablo