Question & AnswerQ&A (CUSTOMS ADMINISTRATIVE ORDER NO. 7-2002, NOVEMBER 29, 2002)
The main objectives are to rationalize the importations of the requirements of export producers by establishing industry-specific Customs Bonded Warehouses and to ensure that these warehouses are not used to delay or evade the payment of proper taxes and duties.
An ICBW is defined as a facility duly licensed by the Bureau of Customs to import under bond and under its name and account raw materials (except fibers, yarns, fabrics, and accessories for garment manufacturing) for storage and subsequent sale/transfer to Customs Bonded Manufacturing Warehouses, ecozone/PEZA locators, or export producers accredited by BoI/DTI for manufacture into export products.
The initial industry groupings are: a) Microelectronics, b) Food Products, c) Motor Vehicle Parts and Components, and d) Raw Materials for Furniture and Home Furnishings.
An ICBW license is valid for a period of three (3) years and is renewable for the same period thereafter. The renewal application must be filed at least three (3) months prior to the expiry of its license; otherwise, the ICBW shall be deemed closed upon expiration.
Prohibited warehousing shipments include: a) Fibers, yarns, fabrics, and accessories for garment manufacture; b) Finished articles except when used as components for other approved export goods; c) Articles not authorized or in excess of volume allowed under the license; d) Prohibited articles or regulated articles without proper clearance or import authority.
First offense: full payment of proper duties and taxes; Second offense: full payment plus one-month suspension of operations; Third offense: full payment plus closure of the warehouse. Violations are counted within the 3-year license period.
Generally, no withdrawals for domestic consumption are allowed except with approval from the Customs Bonded Warehouse Committee and upon payment of applicable taxes and duties. However, domestic sale must not exceed 30% of a particular shipment or else it will be penalized.
Imported articles may be stored for nine (9) months from the date of arrival, with a possible extension of three (3) months granted by the District Collector.
Transfers are done by filing a warehousing entry processed under the existing selectivity scheme and posting bonds. In ports without a year-round selectivity scheme, transfers may be made under a transshipment permit with the warehousing entry filed within five (5) days, extendable for five (5) days.
CBTWs that fail to convert into an ICBW within three (3) months from effectivity of the Order shall be subject to closure proceedings.