Question & AnswerQ&A (CUSTOMS MEMORANDUM ORDER NO. 2-2002, JANUARY 2, 2002)
The main objective is to facilitate trade by allowing the release of low-risk imports with minimum customs intervention at the border, while verifying the truthfulness and accuracy of import entry declarations within three years from filing, ensuring compliance with customs laws.
An importer includes (a) the importer of record/consignee; (b) the beneficial owner; (c) the agent of the person effecting the importation; and (d) any other person or entity who knowingly causes the goods to be imported.
Importers must keep all records of importations, books of accounts, systems data, and relevant documents related to customs commercial data at their principal place of business for three years from the date of filing of the import entry.
Customs brokers must keep copies of importation records for transactions they handle, including records related to shipping, import/export entries, and accounting data, for a period of three years from the date of importation.
Authorized customs officers may enter premises during office hours to conduct examinations, inspections, and verifications of document flow, financial flow, goods inventory, and other business processes; require certified copies of documents; and borrow records with the obligation to return them within 24 working hours.
Denial of access presumes inaccuracy in declarations, justifies reassessment using alternate methods, subjects the party to administrative fines of 20% ad valorem, hold on delivery of imported goods, and may lead to criminal prosecution.
Penalties include a 20% ad valorem administrative fine on the imported articles involved, hold on release of subsequent shipments, and criminal prosecution with fines of Php100,000 to Php200,000 and/or imprisonment from 2 years and 1 day to 6 years.
Deficiencies are penalized based on culpability: negligence (fine ½ to 2 times revenue loss), gross negligence (2½ to 4 times), and fraud (5 to 8 times revenue loss), plus potential criminal prosecution under Section 3611 of the TCCP.
The pre-audit conference introduces the audit team to the company, explains the audit purpose and process, discusses documents required, schedules audit dates, and may include a tour of company facilities involved in import operations.
Decisions can be appealed in accordance with Section 2402 of the Tariff and Customs Code of the Philippines, following the procedures outlined in Customs Memorandum Order No. 1-2002.