Signing of goods declaration not exclusive to customs brokers, rules SC

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Signing of goods declaration not exclusive to customs brokers, rules SC
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  • The signing of the goods declaration is no longer exclusive to customs brokers, according to a Supreme Court decision
  • The high court upheld the validity of Section 106 (d) of the Customs Modernization and Tariff Act, which enables individuals other than customs brokers to act as declarant and sign goods declaration
  • The SC Second Division denied the petition for review of the Chamber of Customs Brokers, Inc. that assailed Court of Appeals and Regional Trial Court rulings that had thumbed down the chamber’s petition for declaratory relief challenging CMTA (Republic Act No. 10863), particularly Section 106 (d)
  • SC ruled that RA 10863 is constitutional and does not violate CCBI’s right to the equal protection of the laws

The signing of the goods declaration is no longer exclusive to customs brokers, according to a Supreme Court decision.

The high court upheld the validity of Section 106 (d) of the Customs Modernization and Tariff Act (CMTA or Republic Act No. 10863), which enables individuals other than customs brokers to act as declarant and sign goods declaration.

It also ruled that RA 10863 is constitutional and does not violate the right of the Chamber of Customs Brokers, Inc. (CCBI), the national association of customs brokers, to the equal protection of the laws.

In a 13-page decision promulgated on February 20, 2023 but released only recently, the SC Second Division, through Associate Justice Antonio T. Kho, Jr., denied the petition for review on certiorari filed by CCBI.  The petition assailed rulings of the Court of Appeals in 2021 and the Regional Trial Court in 2019 that had thumbed down CCBI’s petition for declaratory relief challenging RA 10863, particularly Section 106 (d).

Under Section 106 (d), a person empowered to act as agent or attorney-in-fact for each holder may act as declarant, aside from the importer, exporter, and customs broker.

In 2004, Congress enacted RA 9280 or the Customs Brokers Act of 2004, regulating the practice of customs broker profession. Under Section 27 of the law, import and export declarations should only be signed by customs brokers.

Five years later, RA 9853 was passed, amending Section 27 of RA 9820 such that import declarations can be signed by both a customs broker and the consignee/owner/importer, while export declarations may be signed by the exporter or, at his option, a customs broker or authorized representative.

In 2016, RA 10863 was enacted in response to the Philippines’ obligations under the Revised Kyoto Convention which seeks a balance between customs functions of control and revenue collection and trade facilitation.

Under Section 106 (d) of the law, “A declarant may be a consignee or a person who has the right to dispose of the goods. The declarant shall lodge a goods declaration with the Bureau and may be: xxx A person duly empowered to act as agent or attorney-in fact for each holder.”

Section 107 of the law also states that the declarant “shall sign the goods declaration, even when assisted by a licensed customs broker, who shall likewise sign the goods declaration.”

CCBI then questioned the validity of Section 106(d) of RA 10863 for violating the equal protection clause of the Constitution.

CCBI also argued that Section 106 (d) did not repeal or amend RA 9280 since no irreconcilable inconsistencies existed between them.

In denying CCBI’s petition, the Court held that the equal protection guaranty under the Constitution means that “no person or class of persons shall be deprived of the same protection of laws which is enjoyed by other persons or other classes in the same place and in like circumstances.”

That guaranty, however, “does not demand absolute equality” but merely requires that persons under like circumstances be treated alike, according to the Court.

It added that the equal protection clause “was not intended to prohibit the legislature from enacting statutes that either tend to create specific classes of persons or objects, or tend to affect only these specific classes of persons or objects.”

“A law is not invalid because of inequality. The very idea of classification is that of inequality, so that it goes without saying that the mere fact of inequality in no manner determines the matter of constitutionality,” it said.

All that is required, the Court ruled, is that the classification must be reasonable, specifically that the classification should be based on substantial distinctions which make for real differences. The classification must also be germane to the purpose of the law, and the classification must not be limited to existing conditions only. Further, the Court said the classification must apply equally to each member of the class.

Tests of judicial scrutiny

The Court added that jurisprudence has developed three tests of judicial scrutiny in assessing the reasonableness of classifications: the strict scrutiny test; the intermediate scrutiny test; and the rational basis test.

The strict scrutiny test applies when a classification interferes with the exercise of fundamental rights, including the basic liberties guaranteed under the Constitution. Under this test, the focus is on the presence of compelling, rather than substantial government interest and on the absence of less restrictive means for achieving that interest.

The intermediate scrutiny test, on the other hand, applies when a classification does not involve suspect classes or fundamental rights, but nevertheless requires heightened scrutiny, such as in classifications based on gender and legitimacy. Under this test, governmental interest is extensively examined, and the availability of less restrictive measures is considered.

Finally, the rational basis test applies to all other subjects not covered by the first two tests. This test is often applied in economic legislation.

The Court ruled that jurisprudence has applied the rational basis test mainly in analysis of equal protection challenges.

In the present case, the Court noted that the challenged law, RA 10863, appears to be in the nature of an economic legislation. Hence, in assessing the reasonableness of the classification in the law, the test to be applied is the rational basis test.

Applying the rational basis test, the Court found a legitimate government interest behind RA 10863 and that Section 106(d) of the law, as a means to achieve such government interest, is germane to the purpose of the law.

The Court held that the legitimate government interest behind RA 10863 is the fulfillment of the Philippines’ obligations to the Revised Kyoto Convention “which was intended to, among others, respond to the needs of providing a balance between customs functions of control and revenue collection and trade facilitation.”

The Court further ruled that the means to achieve such interest, Section 106(d) of RA 10863, which states that the signing of goods declarations is no longer exclusive to customs brokers in that such act of signing may already be performed by the declarant himself or their agent or attorney-in-fact, has a reasonable connection with RA 10863’s purpose of making Philippine laws consistent with international standards and customs best practices.

The Court thus declared Section 106 (d) of RA 10863 constitutional, with a reminder that “when the due process and equal protection clauses are invoked, considering that they are not fixed rules but rather broad standards, there is a need for proof of such persuasive character as would lead to such a conclusion. Absent such a showing, the presumption of validity must prevail.”

“Here, no concrete evidence and convincing arguments were presented by [CCBI] to warrant a declaration of the unconstitutionality of RA 10863. In light of the foregoing, the Court rules that RA 10863 does not violate [CCBI’s] right to the equal protection of the laws,” concluded the Court.

CCBI said it will soon issue a statement on the SC decision.

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