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In our previous article, we discussed the customs administrative procedures applicable in (a) abandon-ment pro-ceedings, (b) valuation and classification disputes, and (c) protest and payment under protest. The succeeding paragraphs will touch on the procedures for filing the protest as well as other administrative remedies (e.g. seizures and forfeiture proceedings, Alert Order, Hold Order and Warrant of Seizure and Detention).

Procedures in Protest. The rules in “payment under protest” provide the following requirements:

  1. it must be made in writing (citing decision or ruling and the grounds for the protest);
  2. it must refer to specific transaction / import entry (or many entries if facts and ground are the same);
  3. it must be filed at time of payment of amount under protest or within 15 days from payment;
  4. docket Fees must be paid (non payment will result in dismissal); and
  5. sample articles may be required.

Upon filing of the protest, the District Collector will order the hearing of the case and will decide within 30 days from termination of the hearing. In case of adverse decision, an importer may file a written receipt Notice of Appeal to the District Collector copy furnished the Commissioner within 15 days from written notice of decision. In case the Commissioner reverses the decision of the District Collector resulting in a favorable outcome to the importer, the decision shall be subject to automatic review by the Finance Secretary. In case the Commissioner affirms the decision of the District Collector, the decision will be final and executory although the importer may still file an appeal before the Court of Tax Appeals (CTA).

Automatic Review of Protest Cases. At any time that a decision is made favorable to the importer, said decision will always be subject to automatic review by either the Commissioner (for decisions made by the District Collector) and the Finance Secretary (for decisions made by the Commissioner).

Additionally, the Finance Sectary shall automatically review the protest cases under the following circumstances:

  1. when the value of importation subject of seizure is more than P5 million; or
  2. where there is failure of the Commissioner to render decision within 30 days from receipt of the records. (Reference: Sec. 2313, TCCP, CAO 9-93 and CMO 3-2002)

Seizure and Forfeiture Proceedings. A seizure proceeding normally involves the following:

  1. lawful taking into possession of any vessel, aircraft, cargo, article, animal or other movable property;
  2. seized property is subject to forfeiture or liable for any fine imposed; and
  3. proceedings normally result from a hold or alert orders on shipments.

In addition, foreign articles openly offered for sale may be seized for failure to show evidence of payment of duties and taxes.

Alert / Hold Orders. An Alert Order is generally issued to require spot-checking or 100% physical examination of the subject shipment and to warn concerned customs officials to exert extra diligence in examining the shipment and reviewing the import documents. It is issued based on derogatory information or suspected violation of customs laws, rules and regulations. As a rule, an Alert Order must be recorded by the Office of the Commissioner and must contain a dry seal of the Commissioner.

A Hold Order is issued when the subject shipment has been examined and is already being processed for release. It is issued against a shipment when customs has valid reasons to believe that shipment has violated existing customs laws rules and regulations.

Procedures for Alert / Hold Orders. An Alert or Hold Order must be issued only by authorized customs officials: Commissioner, Dep. Comm., IEG, District Collector, Chief, ESS and Chief, CIIS. The issuance of such order may result in any of the following recommendations:

  1. issuance of a Warrant for Seizure and Detention (WSD)
  2. payment of additional taxes and duties including fines
  3. lifting of alert / hold order (Reference: CMOs 92-91, 104-92 and 4-94)

Warrant of Seizure and Detention (WSD). A WSD is issued by the District Collector upon determination of probable cause of violation of customs laws, rules and procedures. Upon issuance of the warrant, the District Collector must perform the following:

  1. report the seizure to Customs Commissioner and Chairman, Commission on Audit;
  2. notify the importer in writing; and
  3. prepare description, appraisal and classification of seized property

(Our next and last article on the topic will touch on the procedures in WSD cases and appeal procedures under the Post-Entry Audit system.)

The author is an international trade and customs lawyer, and a licensed customs broker. He is also a lecturer on customs and international commerce. Please contact aouvero@dlugms.com or (632) 4050021 / 29 for your comments.

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