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BOC to strictly enforce penalties on use of generic import description

ID-100290608The Bureau of Customs (BOC) has issued a memo reiterating its mandatory order for importers and customs brokers to properly describe imported goods or they face penalties, including full examination of shipments.

In a memorandum dated June 26, Customs Commissioner Alberto Lina directed BOC officials to strictly comply with Customs Administrative Order (CAO) No. 8-2007 (Description of Imported Articles in Tariff Terms) and Customs Memorandum Order (CMO) No. 28-2007 (Implementing CAO No. 8-2007 entitled Description of Imported Articles in Tariff Terms).

Lina said his office “has verified reports that numerous imported goods were declared in general manner to avoid proper classification and valuation or that description of articles in the import declarations were not sufficient in detail to enable the article to be identified for tariff classification, valuation and other statistical purposes.”

Generalized descriptions will adversely impact BOC efforts to establish or publish values and collect the proper duties and taxes from imported goods, Lina explained.

He directed the Assessment and Operations Coordinating Group deputy commissioner “to conduct or direct the conduct of 100% examination of entries containing generally described goods and recommend to the Commissioner of Customs appropriate penalty for habitual violators or persisting to declare their importation in a general manner”, as provided under CAO 8-2007 and CMO 28-2007.

Revival of memos

BOC in 2013 revived the two orders which had previously been unenforced for six years.

In 2013, BOC suspended the accreditation of 26 importers and one customs brokers for describing imported articles in general terms in violation of the two orders. Then in March 2014, 70 traders and 45 customs brokers were suspended for the same violation although the suspension was lifted more than a week after.

CMO 28-2007 requires importers to make detailed descriptions of imported articles in tariff terms, or their shipments will go through 100% examination.

The order aims to foil attempts by importers to evade paying the right tariff by simply giving generic descriptions of their imports.

Under the CMO, the description of articles must be “in sufficient detail to enable the article to be identified for tariff classification, valuation and other statistical purposes.”

Description should be specific, such as centrifugal for pumps, diesel for engines, skimmed for milk, and shoulder for bags. The brand and model or style of the articles, capacity, quality, grade, process, and retail packaging must also be indicated.

The CMO will be the basis for encoding Box 31 of the Import Entry and Internal Revenue Declaration (IEIRD); preparing the packing list, commercial invoices, entry declaration, and Value Reference Information System (VRIS) and Classification Rulings; accomplishing the IEIRD returns by the COO IIIs and COO Vs; and describing items for establishing or publishing values and for statistical purposes.

For motor vehicles, members of the Chamber of Automotive Manufacturers of the Philippines Inc., participants in the Motor Vehicle Development Program, and other importers who are authorized distributors of specific car brands should indicate on the packing or list the chassis and engine number.

The BOC has listed 120 items that are generally declared by importers and are now to undergo 100% examination to determine their conformity to the provisions of CAO 8-2007.

Failure to describe the shipment in detail will be the full responsibility of the importer or broker, the CMO 28-2007 stated. “Good faith is not a defense. Both importers and customs brokers shall exercise utmost diligence in declaring goods for purposes of customs clearance.”

Violators will be given a warning on their first offense, get their accreditation suspended for six months on second offense, and have their accreditation cancelled and name blacklisted on the third offense. – Roumina Pablo

Image courtesy of hywards at FreeDigitalPhotos.net

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