Question & AnswerQ&A (LETTER OF INSTRUCTION NO. 563)
The main objective is to establish and operate bonded warehouses converted into internationally acceptable Exploration Supply Bases in the Philippines to support petroleum and other energy-related exploration activities, accelerating the development of indigenous energy resources.
The Philippine National Oil Company (PNOC) is directed to establish and operate bonded warehouses or Exploration Supply Bases, either by itself or through duly designated qualified operators.
The bonded warehouses are to be established pursuant to the provisions of Sections 1901-1909 of the Revised Tariff and Customs Code of the Philippines, as amended.
PNOC is empowered to prescribe rules and regulations, fix rates and charges, provide necessary facilities and services, grant authority to persons or entities to operate within the Base, enter into contracts for management, and exercise all powers necessary or incidental to the operation of the Bases.
Operators must post a performance bond for the operation of the bonded warehouse and submit a Letter of Guarantee from the PNOC to guarantee payment of duties, taxes, and other charges due on articles transferred into the warehouse or for their re-exportation.
Articles may remain for an initial period of two years from arrival at the port of entry, extendable in one-year increments up to a total maximum of five years subject to satisfactory reasons approved by the Commissioner of Customs.
Articles withdrawn by tax-exempt entities with valid petroleum service contracts, coal operating contracts, or energy production sharing contracts may be withdrawn without payment of duties and taxes upon presentation of a Certificate of Tax Exemption from the Energy Development Board.
Such articles are subject to seizure and forfeiture and sale at public auction or require payment of twice the amount of duties and taxes due on the articles.
The Bureau of Customs exercises technical supervision, ensures compliance with the Tariff and Customs Code provisions, oversees filing of necessary documents, and supervises payment of duties, taxes, and other charges.
Other government agencies, including the Bureau of Quarantine, Philippine Coast Guard, Philippine Constabulary, Telecommunications Control Bureau, Civil Aeronautics Administration, and Philippine Port Authority, are directed to extend assistance needed by the PNOC for effective implementation and enforcement of the provisions.