Customs Modernization & Tariff Act:

Brief Overview and Update

Agaton Teodoro O. Uvero

2Q GMM, PHILEXPORT
New World Hotel, Manila
September 19, 2017
Outline
 Background of CMTA (RA 10863)

 Latest Update and Next Steps

 Main Features

 new policies / provisions

 revised provisions

 Conclusion: CMTA and customs reforms

Background of
the CMTA
Background of the CMTA (RA 10863)
 Initial work started in 2007 to implement the Revised Kyoto Convention (RKC)

 RKC: WCO Convention on the Simplification and Harmonization of Customs

Procedures

 In 2008, bill filed in Congress under the 14th Congress

 In 2010, several bills were filed under the 15th Congress

 In 2012, Bill was passed on 3rd reading under the 15th Congress

 In 2013, new versions of the bill were refiled under the 16th Congress

 Consolidate bill ratified by the House and Senate in January 21, 2016
Background of the CMTA (RA 10863)
 CMTA signed into law as RA 10863 on May 30, 2016

 CMTA (with 315 provisions) is based on RKC, WTO Trade Facilitation

Agreement (WTO TFA), customs reform agenda and private sector inputs

 Thereafter, DOF and BOC created an internal working group to draft the IRR

 Draft IRR subject of ongoing public consultations; Several CAOs issued on:

 De Minimis Rule on Importations

 Balikbayan Boxes / Returning Residents (Conditionally-Free Importation)
 Advance Ruling
 Baggage of Travelers and Crew
 Clearance of Postal Items
Main Features
New Concepts and Policies
 expansion of the customs mandate to include trade facilitation: sec 202

 promotion of ‘paperless’ transactions through use of information and

communication technology: sec 109

 legal interest of 20% for unpaid taxes and duties: sec 104

 relief consignment, tax and duty free status during a state of calamity: sec
120-21

 Free Zone to harmonize rules in PEZA zones and freeports: sec 102, 814-17
New Concepts and Policies
 advance ruling/dispute settlement (protest) to allow early resolution of
customs issues even if there is no actual importation involved: sec 1100-03,
1106

 “alerts”, to harmonize and simplify rules on apprehension of shipments, to

make process transparent, and to prevent abuse: sec 1111-12

 provision for summary remedies such as distraint on personal property and

levy on real property to collect duties, taxes and other charges arising from a
customs audit: sec 1132-34

 forfeiture fund for the purpose of outsourcing customs functions, facilitating

processes, capacity building, and modernization through automation: sec
1151
Revisions
 redefinition of the term ‘declarant’, to allow importers to transact with bureau,
directly or through authorized representatives / 2 year option provision on
SPA: sec 106

 prohibited, regulated and restricted imports: sec 116-19

 majority of DepComs are organic: sec 200

 transfer of assessment officers after 3 years: sec 201

 assignment within the bureau: sec 209

 additional conditions for the exercise of the power to visit and inspect
commercial establishments by non-customs personnel: sec 224
Revisions
 procedure allowing submission of provisional goods declarations in cases of
incomplete documents or information necessary to file entry: sec 403

 CBW and CFW (customs facilities and warehouses): sec 801-05

 period of storage CBWs (1 year / 3 months), may be extended: sec 811

 settlement (redemption and fine): sec 1124

 redefinition of “abandonment” / reclaim of shipment: sec 1129-30

 surcharge in misclassification, misdeclaration and undervaluation, penalty is

250% and 500%: sec 1400
Provisions on ‘Exports’
 Free Zone to harmonize rules in PEZA zones and freeports: secs 102, 814-17

 Authorized Economic Operator (AEO): secs 102, 1227

 redefinition of the term ‘declarant’, to allow importers to transact with bureau,

directly or through authorized representatives / 2 year option provision on
SPA: sec 106

 Bureau or any designated govt agency may issue Certificate of Origin;

exporter may adopt customs-accredited self-certification system; sec 503

 transit vs. transshipment: secs 600-03

CONCLUSION
Conclusion
 CMTA provides for

- less discretion
- international best practices
- clear and simplified rules
- less penalties for errors and omissions (sec. 108)
- increased penalties for fraud / smuggling

 CMTA and the customs reform agenda

Thank you
About the Speaker

Agaton Teodoro O. Uvero is an international trade, indirect tax and supply chain practitioner. He is the Editorial Board
Chairman of Asia Customs & Trade, Senior Partner at Worldtrade Consultants, Inc., and Chairman of Grupo Uvero,
Inc.

Mr. Uvero began his career at PricewaterhouseCoopers (PwC) Consulting, and continued his consulting career by
working on technical assistance programs funded by the Asian Development Bank, United States Agency for
International Development, and Japan International Cooperation Agency. He has served the Philippine government
from 2013 to 2016: as Deputy Commissioner of the Bureau of Customs, Department of Finance, and as Chairman of
the Asia-Pacific Economic Cooperation Sub-Committee on Customs Procedures (2015).

Throughout his career, Mr. Uvero has complemented his private and public sector pursuits with stints in education. He
has lectured at the Ateneo Graduate School of Business-Center for Continuing Education and BayanTrade Academy on
International Supply Chain Management, and currently lectures at the UP Law Center (MCLE Program) on
international trade, tariff and customs.

Mr. Uvero has provided advisory services and training for many of the Top 1000 Philippine corporations, professional
and industry associations, and business chambers. He is a regular speaker in local and international conferences. Mr.
Uvero has degrees in Philosophy and Law from the University of the Philippines and is an alumnus of East West
Center (Hawaii).