Question & AnswerQ&A (BC CUSTOMS ADMINISTRATIVE ORDER NO. 10-2007)
The order covers the disposition of articles under customs custody as enumerated in Section 2601 of the Tariff and Customs Code of the Philippines (TCCP), as amended, through public auction or negotiated sale pursuant to Section 2610 of the same Code.
Articles under customs custody shall be disposed of through sale by public auction in the absence of any special provision of law.
The floor price shall not be less than the wholesale value of canvassed domestic wholesale prices of the same, like or similar articles, subject to approval by the Chief, ACDD and the District Collector. It must also not be less than the sum of the total landed cost based on published/circularized VRIS-OCOM test value plus taxes, taking into account obsolescence, condition, and reasonable depreciation.
The notice must include the specific date, time, and place of the auction; lot numbers with consignee names; specific descriptions of goods including quality, condition, volume/quantity, date of arrival, and for motor vehicles the Year Model, Make/Brand, VIN, Chassis and Engine Nos.; floor price per lot; inspection schedule; and terms and conditions such as registration requirements, bidding systems, clustering, and payment procedures.
The notice must be published in at least two newspapers of general circulation and posted on the Bureau website and/or at a conspicuous place within port premises at least 10 calendar days before the auction, or at least 3 days in the case of perishable goods. Outside Metro Manila, Cebu, Cagayan de Oro, and Davao, it must also be posted at the city/municipal hall bulletin board where the port is located.
Participants must file a duly accomplished registration form, pay a non-refundable registration fee of Php2,000, post a cash or manager's check bond worth 20% of the floor price (unless the floor price is below Php10,000), and for regulated commodities, submit proof of qualification as importer/trader. They must also provide their names, addresses, TIN, and submit their latest income/business tax returns duly validated by BIR.
Clustering happens when the difference between the highest and the second highest bid is within 10% of the highest bid. An open bidding shall be conducted among the bidders with the highest bid as the new floor price, only bids at least 3% higher than the new floor price are considered, and the highest bid in open bidding wins. If no higher bids are made, the highest sealed bid wins.
The highest bidder shall be disqualified from further participation in the auction and, if applicable, in the negotiated sale. Their cash bond and any payment made shall be forfeited and other sanctions may be imposed.
If bidding fails, a second auction is held on the third business day at the same floor price without further advertisement. In perishable goods' cases, the second auction is held on the first business day following the first bidding.
The committee is chaired by the Deputy Commissioner, Internal Administration Group, with members from OCOM and DOF representatives. It implements provisions on negotiated sale, conducts ocular inspections, rejects offers, recommends acceptance to the Secretary of Finance, and oversees publication, posting, records, and report preparation.
Participants must submit a sealed offer to buy with sale lot and amount, TIN number, official receipt for Php2,000 registration fee, latest income/business tax returns validated by BIR, proof of qualification as importer/trader for regulated commodities, and other requirements imposed by the Committee.
The offeror must pay a 20% guarantee cash deposit within 24 hours from notice by the Committee, 30% within 48 hours after Secretary of Finance's approval, and the remaining 50% in full on the succeeding business day. Failure to comply leads to forfeiture and sanctions.
The Order takes effect 15 days after complete publication in two newspapers of general circulation.