FOR many years now, the Bureau of Customs (BOC) has been slowly implementing its P500-million automation program. In recent weeks, the bureau has been pilot testing the new automated import assessment system in the Port of Batangas. BOC plans to implement the system in all the ports before the end of the year.
What is the New System?
We have summarized below the detailed steps of the new system:
- BOC Port Operations/Inspection Division encodes the arrival schedule.
- Shipping Lines/Airlines/NVOCCs submit electronic manifests and bills of lading/airway bill through the Value Added Service Provider (VASP).
- Importers/Customs Brokers secure licenses, clearances, and permits to import regulated/prohibited goods from the concerned government agencies prior to filing import entry declaration.
- Importers/Customs Brokers file the import entry declaration (stating the bank account information and applicable TEC, TDM, and IED accounts) by filling out the Single Administrative Document (SAD) declaration online through the VASP.
- BOC Port Assessment Division examines, appraises, and performs final assessment of the import entries and cargo declaration.
- BOC e2m Customs System sends payment instruction to the importer’s banks for debiting of assessed duties and taxes from their accounts.
- Importers/ Customs Brokers receive electronic ‘Statement of Settlement of Duties and Taxes’ from BOC through the VASP.
- BOC e2m Customs System generates and transmits online release instruction to the temporary storage facility through the Online Release System for the final release of cargo.
How to Avail of the System
Prior to the filing of import transactions through the new system, importers and customs brokers are required to have the following:
- Valid and active Client Customs Number (CCN) from the Client Profile Registration System (CPRS).
- Bank Account/s information and bank reference numbers of their Authorized Agent Banks (AABs) for payment of customs duties and taxes.
- Appropriate import licenses/clearance/permits from concerned issuing agencies for the importation.
- Applicable non-cash payment instruments
- Tax Debit Memo (TDM)
- Tax Exempt Certificate (TEC)
- Import Entry Declaration (IED, for advance duty payments)
- Deferred Payment for Government Agencies
- Other supporting documents
For the last two years, BOC has issued numerous implementing rules and guidelines to implement the new system. Among the major customs issuances relating to the new system are as follows:
- CAO 2-2007 – Accreditation, Establishment of and Operation of eCustoms VASPs
- CAO 10-2008- Payment Application Secure System Version 5.0
- CMO 39-2008- Client Profile Registration System (CPRS)
- CMO 6-2009- Procedures for Advanced Duty Deposit and Final Payables
What is not Automated?
BOC has announced that the new system will facilitate import processing towards a “cash-less, queue-less, and hassle-free transaction environment”. A review of the new system will indicate that actual import assessment remains manual. What have been automated are merely those processes before and after the customs assessment process. For those dealing with customs on a regular basis, most of the delays in import processing are really due to the manual process of assessing importation. The assessment process is not only tedious and costly but is also redundant due to the post entry audit system. BOC has to address this policy and operational concern if it is really serious in implementing a truly automated system.
A concern also for many importers is that the new system provides for an automatic debiting of duties and taxes from the importers’ bank accounts. Most of the importers would rather have a system where they first verify the tax and duty assessment and then they send out instructions to their banks to allow the debiting. In an automatic debit system, a wrong assessment may result in overpayment of duties and taxes.
The author is an international trade, indirect tax (customs) and supply chain expert. He is the Editorial Board Chairman of Asia Customs & 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 email@example.com and firstname.lastname@example.org