Question & AnswerQ&A (BOC Customs Administrative Order No. 03-2015)
The objective is to provide consolidated guidelines for the imposition of administrative and criminal penalties related to post-entry audits of import transactions, and to amend and consolidate rules and procedures on the imposition of penalties under previous Customs Memorandum Orders and Customs Administrative Orders.
An administrative fine equivalent to twenty percent (20%) ad valorem on the articles subject to importations for which no records were kept and maintained, and hold delivery or release of subsequent imported articles until payment of the fine or penalty.
The penalties include reassessment of importations applying correct valuation methods, administrative fines equivalent to twenty percent (20%) ad valorem on the articles subject to importations, and hold delivery or release of subsequent imported articles for payment or penalty.
Penalties are classified based on three degrees of culpability: Negligence, Gross Negligence, and Fraud, each with corresponding administrative fines calculated as multiples of the revenue loss.
Penalty multiplier = 50% + (revenue loss percentage x 1.5), where revenue loss percentage = (what should have been paid - what was paid) / what should have been paid.
Indicators of fraud include unresponsive or misleading statements in Single Comprehensive Reply (SCR), failure to file SCR, unauthorized withdrawal of items, misclassification of items, mislabeling of containers, inconsistent or contradictory data, habitual errors, and other suspicious practices.
Yes, except in cases of fraud, the Commissioner of Customs may, with the Secretary of Finance's approval, compromise fines when the importer makes a voluntary and full disclosure of the deficiency prior to audit commencement.
All information obtained confidentially for customs valuation or audit purposes must be strictly confidential and cannot be disclosed without specific permission except in judicial proceedings. Violations are prosecutable under Section 360 of the TCCP.
The Commissioner can issue a collection letter or formal assessment and demand letter directing payment within ten working days, and may order hold on subsequent imported articles until fines and penalties are settled.
Mitigating circumstances include contributory government error, extraordinary cooperation in audit, corrective actions by importer, immediate payment of deficiencies upon notification, absence of prior violations, and similar factors.
Aggravating circumstances include delayed or noncompliance with document demands, obstruction or delay of administrative proceedings, prior violations of customs laws, and similar situations.
The importer may file an appeal to the Court of Tax Appeals within thirty (30) days from receipt of the collection or demand letter, following applicable laws, rules, and regulations.
Yes, criminal prosecution can be instituted under relevant sections of the Tariff and Customs Code of the Philippines against erring importers or brokers in addition to administrative sanctions.
Customs Officers conduct prosecutions in the name of the Government of the Philippines, while determination of probable cause in criminal cases remains with the Department of Justice prosecutors or authorized officials.