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Certificate of origin

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Customs commissioner Rey Leonardo Guerrero has instructed concerned customs officials and personnel to strictly review all certificates of origin (COs) to ensure shipments availing of preferential tariff are qualified.

In a memo dated November 6, Guerrero said Bureau of Customs (BOC) personnel must strictly comply with Customs Memorandum Order (CMO) No. 16-2011 and all other relevant laws, rules and regulations for shipments availing preferential tariff treatment.

Guerrero said the order for a strict review, evaluation and validation of COs will allow the BOC “to collect optimum revenue and to prevent unqualified importations from availing preferential tariff rate.”

Aside from validating the authenticity and accuracy of the information in COs, Guerrero noted that collection districts also have the responsibility to “ensure that shipments are qualified for preferential tariff treatment and conform with the origin criteria of the Rules of Origin (RO) of a particular free trade agreement (FTA).”

BOC assistant commissioner and Post-Clearance Audit Group head Atty. Vincent Philip Maronilla, in a text message to PortCalls, said their initial audit “reveals legitimate concerns on whether certain products covered by COs comply with their qualifying Rules of Origin.”

Asked what issues have been observed, Maronilla said “the pattern seems to suggest non-compliance with the rules itself.”

A preferential tariff is a tariff schedule under which one or more nations are given lower rates or other advantages over other countries.

A CO is an international trade document attesting that goods in a particular export shipment were wholly obtained, produced, manufactured, or processed in a particular country. The CO, which also serves as an exporter’s declaration, has to be submitted to secure preferential tariffs.

ROs are the criteria needed to determine the national source of a product and are used to determine whether imported products shall receive most-favored-nation treatment or preferential treatment.

Guerrero said failure by any customs personnel to comply with the memorandum’s directives will not be tolerated and will be dealt with accordingly pursuant to the provisions of Section 1431 (statutory offenses of officers and employees) of the Customs Modernization and Tariff Act.

BOC has repeatedly directed its officials to establish, activate, or reconstitute a preferential rate unit (PRU) at their ports to prevent unqualified shipments from availing of tariff preferences under the Philippines’ FTAs, in compliance with sections 3.1 and 3.2 of CMO 16-2011.

CMO 16-2011, issued in 2011, provides guidelines for implementing executive orders that modify rates of duty of certain imported articles, as provided under the Tariff and Customs Code of 1978, as amended, in order to implement the Philippine schedule of tariff reduction on articles included in FTAs.

These FTAs include the Association of Southeast Asian Nations (ASEAN) Trade in Goods Agreement, ASEAN-China FTA, ASEAN-Korea FTA, ASEAN-Japan Comprehensive Economic Partnership Agreement, ASEAN-Australia and New Zealand FTA, ASEAN-India FTA, and Philippines-Japan Economic Partnership Agreement.

Under CMO 16-2011, a special unit called PRU shall be created in the Formal Entry Division at the principal port of entry in every collection district. Under CMO 15-2019 (guidelines for the application, submission, and processing of ASEAN electronic COs using the Philippine government’s new platform, TradeNet), PRUs also receive and evaluate the authenticity of electronic COs and origin declarations submitted by importers availing of preferential tariff rate for products exported by an ASEAN member state to the Philippines. – Roumina Pablo

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