Friday, October 22, 2021
HomeOpinionAcross BordersCAO 3-2006-A: Implementation and Practical Issues

CAO 3-2006-A: Implementation and Practical Issues

AS written in last week’s article, CAO 3-2006-A seems to have addressed the immediate concerns of the freight forwarding industry even if industry leaders have noted that controversies and implementation issues remain.

On top of the unresolved concerns, new issues have been raised as a result of the revisions. Obviously, the opposing camps have varied and differing opinions as to the new issuance. The new rules are more aligned with international best practices and the freight forwarding industry seems satisfied with the attempt to provide a “win-win” solution. Customs brokers’ groups, however, have threatened to file cases against the legality of some of the provisions. Our discussion here will focus more on the major practical concerns, rather than the legal issues, arising from the issuance of the new rules.

Filing of Import Entries by Corporations. The main question for many now is whether the revised rules allow corporations to still file import entries using their TIN numbers as corporate broker in the Automated Customs Operating System (ACOS), with the entries signed by their principal or alternate customs brokers. The CAO is quite clear on this: Only licensed customs brokers duly accredited by BOC (as an individual or as partner of a general professional partnership) may sign the import and export entries. A contrary opinion is that customs brokerage corporations should still be allowed to file their import entries using their principal or alternate brokers based on the provision that “nothing herein shall be construed as prohibiting corporations engaged in the business of customs brokerage to transact business with the bureau pertaining to shipments of their clients for as long as entries with supporting documents are duly signed by a licensed accredited customs broker”.

This phrase is, however, qualified by the provision that import and export entries must be “duly signed by licensed and BOC accredited customs brokers”. Under the revised rules, the term customs broker refers to “any bona fide holder of a valid Certificate of Registration/Professional Identification Card issued by the Professional Regulatory Board and the Professional Regulation Commission who is accredited to practice in the Bureau of Customs”. The definition does not refer to a corporate customs broker. Stated otherwise, a BOC-accredited customs broker is an individual professional accredited under the present rules. The phrase “to transact business” may refer to the customs processing of import and export entries, and not to the signing of such entries.

Given that definition, what will happen now to corporations previously accredited under the old rules?

TIN Number in the Import Entry. Prior to the passage of Republic Act 9280 and as provided under the old accreditation system, corporations (with their principal and alternate customs brokers) are required to be accredited at each and every customs collection district. Once accredited by the collection district concerned, the TIN of the corporation is uploaded to the ACOS before actual filing of any import entry is allowed. The TIN is a required field of information when the electronic copy of the import entry (otherwise known as the Single Administrative Document or SAD) is filled out at the Entry Encoding Center operated by the Philippine Chamber of Commerce and Industry. Without this TIN, corporations are unable to file import entries under their corporate name using their principal or alternate customs brokers.

Under the rules provided in CAO 3-2006-A, only individuals may be accredited and as such, only the TIN of these accredited individual customs brokers or general professional partnerships may be uploaded in the ACOS. Considering that corporations are not allowed to be accredited under the new rules, the customs accreditations previously issued to these corporations are deemed to have lapsed or expired and as such, the corporate TIN uploaded in the ACOS will have to be removed. To date, however, the TIN of corporations remains in the ACOS.

Rules in Practice. The revised CAO has specific provisions as to who can be customs brokers in the import and export entries. And these specific rules refer to individuals and not to corporations. Unfortunately, while the rules seem to be clear on who is allowed to sign the import and export entry as a customs broker, present customs operations still allow corporations to file their import entries although some ports have reportedly disallowed the filing of import entries under the TIN of corporations. Going forward, will customs then remove the TIN from the ACOS and, if yes, when? Or will customs still allow corporations to file the import entries, notwithstanding the contrary provisions in the revised rules?

The CAO provides that existing customs brokerage corporations may continue to transact “business” with customs, however, the rules provide that only BOC-accredited customs brokers may sign the import and export entries. If customs will allow corporations to continue filing their entries, what will be the basis for their accreditation? Customs will have to clarify these seemingly conflicting provisions. In addition, customs should also issue guidelines as to the apparent disconnect between the revised rules as against actual practices.

Customs Representatives of Corporations. The revised rules now allow freight forwarders accredited by the Philippine Shippers Bureau (PSB) and the Civil Aeronautics Board (CAB) to employ their own customs representatives to process the import and export entries signed by the individual customs broker (or partner of a GPP) who is accredited by BOC. The same rules, however, only provide for the qualification requirements of customs representatives employed by customs brokers but not those employed by freight forwarders. There is also no specific provision in the revised rules allowing the accreditation of customs representatives employed by customs brokerage corporations not accredited by PSB or CAB. There is doubt as to whether the absence of these specific provisions can be cured by the issuance of a Customs Memorandum Order.

If not or unless the law is amended, a revised CAO may again have to be issued soon.

The author is an international trade lawyer and a logistics and supply chain consultant. He is the Editorial Board Chairman of Asia Customs and Trade, an online portal on customs and trade developments affecting global trade and customs compliance in Asia. He was also Bureau of Customs Deputy Commissioner for Assessment and Operations Coordinating Group (2013-2016). For questions, please email at ( or


Please enter your comment!
Please enter your name here

2 × five =

- Advertisment -

Most Popular

- Advertisment -