CATAPANG, ARJHAY R.

BSCA – 2104
MODULE 1

A. Define the following terms.

1. Alert Order
Refer to a written order issued by the Commissioner, District Collector, or other customs officers
authorized in writing by the Commissioner after the Lodgment of Goods Declaration and before
their actual release from customs custody, on the basis of derogatory information regarding possible
non-compliance with the CMTA and other laws, rules and regulations enforced by the Bureau.
2. Certificate of Authority to Operate
Refer to the document signed by the Commissioner of Customs and issued by the Bureau to
persons, natural or juridical, duly authorized to operate a CBW, to be an accredited member,
accredited subcontractor or accredited client/end-user stating its name, authority (license) number,
exact office and warehouse address, date of grant and expiry of authority and type of the approved
warehouse, renewable every three (3) years, after proper re-evaluation and favorable
recommendation by the CBW.
3. Certificate of Identification
Refer to the document certifying that the finished products to be exported is from a particular
warehousing entry, and also determine whether or not a particular entry is partially or fully
consumed.
4. Certificate of Importer Accreditation
Refer to the document issued by the Bureau to an entity registered as importer and recognized to
electronically lodge goods declaration in the Bureau’s existing registration system.
5. Client-Exporter
Refer to a natural or juridical person engaged in the manufacture or export of products utilizing
goods, raw materials, accessories and packing materials sourced from a CBW and members subject
to the condition that finished products shall be exported within the period prescribed by existing
laws and regulation.
6. Customs Premises
Shall include customs offices, facilities, warehouses, ports, airports, wharves, infrastructure and
other areas within the customs districts over which the Bureau shall have exclusive control, direction
and management for customs purposes.

7. Formula of Manufacture
Refer to the formula of conversion issued by the Industrial Technology Development Institute
(ITDI) to the CBW operator and members, determining the raw material usage and wastage of a
particular finished product for export and subsequent liquidation.
8. Importation
Refer to the act of bringing in of goods from a foreign territory into the Philippine territory,
whether for consumption, warehousing, or admission.
9. Liquidation of Raw Materials
Refer to the process of accounting the usage of bonded raw materials, including wastages, in the
manufacture of finished products for export as against the importation by CBWs of raw materials
using FOM.
10. Physical Security Feature
Refer to a system to secure and monitor premises, storage and production areas of CBWs
including the safety of personnel.
11. Sub-contractor
Refer to imported raw materials or goods that have undergone processing which shall be used in
the further manufacture of finished products for export.
12. Lodgment
Refers to the registration of a goods declaration with the Bureau.
13. Extension Warehouse
Refer to a separate warehouse authorized by the Bureau to from part of an already existing CBW
to optimize capacity and efficiency in its operations.
14. Diversion
Refer to a violation of customs law committed when an imported materials entered through the
warehousing scheme and destined for transit to a particular CBW, Free Zones locator/enterprise, or
from the CBW to the port or airport for exportation, is bought to some place other than its intended
destination.
15. Unauthorized Withdrawal or Repacking
Refer to the withdrawal of any materials/goods stored in a CBW without the duly processed
withdrawal or requisition slip, or the substitution of materials or finished products with local
materials or goods.
Refer to the act of fraudulent concealment, removal, or repacking merchandise in any CBW; or
fraudulent alteration, defacement, or obliteration of any markings or numbers placed upon packages
deposited in such warehouse or aiding or abetting any such acts.

16. Dangerous or Hazardous Goods

Goods classified, designated, or described as dangerous by any statute, regulation, or the
Dangerous Goods code issued by the International Maritime Organization and also includes any
Goods which are or may be unstable or present a hazard or danger to the conveyance in which they
 are carried or to other property, goods or any person, whether or not the Goods are identified as
dangerous by any authority.

17. Designated Areas for Abandoned, Overstaying and Forfeited Goods within CFW
Refer to a special area designated by a CFW where the Bureau may establish a temporary storage
for abandoned, overstaying and forfeited goods.
18. Security
Refer to any form of guaranty, such as a surety bond, cash bond, standby letter or credit or
irrevocable letter of credit, which ensures the satisfaction of an obligation to the Bureau.
19. Transfer Note
Refer to a customs document that accompanies the transfer or transit under guard of bonded
imported goods to a Free Zone locator/enterprise or to another CBW and serves as proof of delivery
or receipt of the goods at its intended destination duly acknowledge on its face by the Collector of
Customs or his duly authorized representative.
20. Abandoned or Overstaying Goods
Abandoned or overstaying goods shall refer to goods which fall under any of the following
circumstances:
(1) expressly abandoned goods;
(2) Implied abandoned goods on account of the following;
(2a) Failure to lodge/file goods declaration within the period prescribed under section 407 at the
CMTA;
(2b) Failure to pay duties and taxes and other charges upon final assessment, on upon receipt of
the order of release or order lifting the alert, or both;
(2c) Failure to submit clearance, licenses, and other requirements within the period prescribed
under the CMTA;
(2d) Failure to claim duty and tax paid imported goods within the period prescribed under the
CMTA; (2e) Failure to mark within the period prescribed under the CMTA;

(3) Imported goods which have exceeded the allowable period of temporary storage at the terminal
facility due to customs laws, rules and regulations, which resulted in the issuance of alert or hold
order, warrant of seizure and detention, or such other instances as declared by the commissioner.

B. Answer the following questions:

1. Who shall be liable for any loss or damage to the goods stored in a Bonded
Warehouse? What should be the penalty, if any?
 In case of loss of the goods stored in Bonded Warehouse due to the operators’ gross negligence or
willful misconduct, the operator shall be made liable for the payment of duties and taxes due thereon.

2. What would happen to the application for establishment of a Bonded Warehouse if,
after the prescribed period, the District Collector concerned did not act upon it? Will
the District Collector be penalized for such act?
In case of failure to act within the said period, application for establishment or renewal is deemed
favorable acted upon by the district collector who shall forward the records to the commissioner for
appropriate action.

3. How much security/bond will be required for goods to be entered under a

warehousing scheme? Who shall require it?

To those goods declared and entered under the CBW scheme, the District Collector shall require the
importer to put sufficient security equivalent to the assessed duties, taxes, and other charges as a
condition for storage and withdrawal of the bonded goods within the period prescribed by section 811,
chapter 2, title VII of the CMTA, or the payment of duties, taxes, and other charges upon compliance
with all importation requirements.

4. Under the law, what will be required if you intend to withdraw your goods stored in a
bonded warehouse for local consumption?
It shall only be withdrawn upon payment of the assessed duties, taxes and other charges.

5. Is the transfer of imported goods entered under warehousing scheme to another

Bonded Warehouse allowed under the law? What about another subsequent transfer
to another Bonded Warehouse?
The transfer of imported goods shall be allowed when the corresponding warehouse entry together
with the required documents as provided by existing laws and regulations are electronically lodged at
the concerned office of departure. Any subsequent transfer may be done if and only if both facilities are
either public or private, not different.

6. Enumerate different types of Bonded Warehouse for storage purposes.

There are two different kind of bonded warehouses: the first one is Manufacturing Customs
Bonded Warehouse, consist of Miscellaneous Manufacturing Bonded Warehouse, Garments and
Textiles Manufacturing Bonded Warehouse, Customs Common Bonded Warehouse, Industry-Specific
Customs Bonded Warehouse, and Private Non-Manufacturing Warehouse, while the other type is the
Bonded Non-Manufacturing Warehouse consist of Public Bonded Warehouse, Private Bonded
Warehouse, Airlines Customs Bonded Warehouse, Multinational Regional Bonded Warehouse, and
Duty-Free Shops.

7. Differentiate Customs Bonded Warehouse (CBW) from Customs Facilities and Warehouses
(CFW).
The Customs bonded warehouses may be classified as either manufacturing or non-manufacturing
while the Customs facilities and Warehouses shall include container yard, container freight station,
seaport warehouses, and airport warehouses.

8. What are the documents required for the application to operate a CBW? CFW?
Any person or firm desiring to establish and operate a CBW shall submit the following requirements:
a. BOC Certificate of Accreditation as importer;
b. Certificate True Copy of Articles of Incorporation or Articles of Partnership, and by-
laws.
c. Department of Trade and Industry (DTI) Certificate of Business Registration for sole
proprietorship;
d. Certified True Copy (CTC) of Mayor’s permit;
e. Barangay Clearance;
f. Certificate of Bureau of Internal Revenue (BIR) Registration;
g. Income Tax Return (ITR) and Latest Audited Financial Statements, if applicable;
h. Lease contract or certificate of title to the real property where the proposed CBW is
located;
i. Warehouse location or vicinity map showing the area and means of access;
j. Warehouse layout showing and describing the following:
i. Floor plan and building structure;
ii. Storage areas for raw materials, finished products and wastages;
iii. Production area;
iv. Office spaces for both CBW and customs personnel; and
v. Physical security feature:
k. List of machineries and equipment;
l. feasibility study;
m. List of materials to be imported; and
n. Formula of Manufacture or Conversion, if applicable.

In CFW:

(1) Securities and exchange commission articles of incorporation, DTI certificate of business
registration, BIR certificate of registration and mayor’s permit (if not yet filed under CPRS);
(2) location and layout of facility, including machineries, equipment as applicable (including lease
contract on title to the property);

(3) Audited financial statements for the last two years immediately preceding the date of application;

(4) Manual of web-based inventory management system;

(5) layout of the proposed customs facility for use of customs personnel complement; and

(6) layout for the designated examination area and non-intrusive inspection equipment facility as may be
applicable.

9. How much will be the penalties for late filing of application for renewal of Authority
to Operate a CBW?
Those who will fail to file application for renewal shall considered as closed at the end of the term
and their accounts shall be liquidated upon.

(a) Within 1 to 30 days, a penalty will be Php 5,000.

(b) Within 31 to 60 days, a penalty of Php 10,000.

(c) Within 61 to 90 days, a penalty of Php 15,000; together with 91 to 120 days for members of
CCBW and ICBW, a penalty of Php 15,000.

10. Will authorized customs personnel be allowed entry to any Bonded Warehouse
beyond regular work hours? Why?
No, because it is the responsibility of the operator, upon lawful demand, to allow duly authorized
personnel access to the premises at a reasonable time during work hours and to obtain data, documents,
and records pertaining to the operations. The operator shall be liable for payments in case of loss of
goods stored un CFWs.