Question & AnswerQ&A (BOC CUSTOMS MEMORANDUM ORDER NO. 22-2003)
The primary objective is to ensure that only surety companies in good standing are authorized to underwrite bonds guaranteeing the performance of importer obligations, protecting government interests and providing mechanisms for settling outstanding accountabilities.
Only surety companies in good standing with the Bureau of Customs qualify, meaning they have authority from the Office of the President to engage in surety business, hold a valid Certificate of Authority from the Insurance Commission, have no due and demandable liabilities with BOC, and have settled at least 70% of outstanding obligations as of the first day of the preceding quarter.
The accreditation is effective for one quarter and is renewable every quarter thereafter.
Documents required include: Administrative Order from the Office of the President, Certificate of Authority from the Insurance Commission, latest audited annual financial statement, Certification from the Corporate Secretary regarding authorized signatories and specimen signatures, and an affidavit stating no outstanding obligations exceeding the 30% threshold with BOC.
The 30% threshold means a surety company must have settled at least 70% of its outstanding bond obligations with BOC; the unsettled obligations should not exceed 30% as of the first day of the immediately preceding quarter.
The Bonds Division of the port processes the applications, which are then reviewed by the Collection Service and finally approved by the District Collector.
The Collection Service may recommend liquidation or settlement arrangements, and if the outstanding obligations exceed the threshold without satisfactory resolution, the application for accreditation may be denied.
They are responsible for ensuring the smooth, proper, and effective implementation of this Order in their jurisdictions.
All customs orders, rules, regulations, or parts thereof inconsistent with this Order are repealed or modified accordingly.