QuestionsQuestions (BOC MEMORANDUM)
It aims to correct and prohibit the practice of transferring goods directly to accredited subcontractors/locators without the required prior warehousing procedures and verification, thereby ensuring accurate identification, correct quantity, and effective monitoring to prevent misdeclaration and over-quantity farming out.
Because it allowed the Customs Warehouseman to certify descriptions and quantities based solely on those documents without physically transferring/storing the goods in the operator’s CBW first, rendering the control mechanism ineffective.
CMO No. 39-91 implementing CAO No. 2-91, which governs the establishment, supervision, and control of Customs Bonded Warehouses.
They must be physically transferred and deposited to the Customs Bonded Warehouse in accordance with CMO No. 39-91 implementing CAO No. 2-91; direct transfer to subcontractors/locators without prior CBW deposit is not allowed.
(a) Warehousing Entry must be filed; (b) upon submission of formula of manufacture, the stages to be subcontracted shall be specified whenever practicable; (c) certification by the Customs Warehouseman on description and quantity of goods to be transferred; (d) for garment manufacturers, unless otherwise approved by GTEB, only pre-cut or cut-to-pattern materials may be transferred; and (e) the transfer must be covered by the corresponding boatnote/withdrawal permit/authority to withdraw, recorded in a logbook by the Customs Warehouseman.
It is a control safeguard requiring the Customs Warehouseman to verify and certify the exact identification and quantity of the raw materials/goods before transfer, not just rely on requisition documents.
It ensures that the goods are properly declared and entered into the customs warehousing system before any transfer to accredited parties is allowed.
Upon submission of the formula of manufacture, the stages to be subcontracted shall, whenever practicable, be specified.
Unless otherwise approved by GTEB, only pre-cut or cut-to-pattern materials shall be transferred.
The transfer must be covered by a corresponding boatnote/withdrawal permit/authority to withdraw.
The transfer must be recorded in a logbook by the Customs Warehouseman.
The mechanism designed to safeguard against misdeclaration, over-quantity in farming out raw materials/goods, and the expeditious monitoring of imports.
Accredited subcontractors, accredited members of Common Bonded Warehouse, and Special Economic Zone locators from CBWs operating under Section 105 of the TCCP.
It signals that customs authorities expect all operating divisions and warehouse operators to implement the listed conditions immediately; continued practice inconsistent with these requirements could subject them to enforcement, correction, or sanctions under customs rules.
It treats such practice as non-compliant, because it allows certification without prior physical transfer and deposit and therefore defeats the required verification of description and quantity.
Before transfer is allowed, the Customs Warehouseman must verify and certify the exact identification and quantity of raw materials/goods, after the goods have been physically transferred and deposited in the CBW.