Administrative Fines, Penalties, Surcharges, and Other Sanctions
Recordkeeping and Access to Records
- Failure to keep required records: 20% ad valorem administrative fine plus potential hold on delivery of subsequent imports.
- Failure/refusal to grant full and free access to records: reassessment of import values presuming declared values inaccurate, 20% ad valorem fine, and potential hold on deliveries.
Failure to Pay Correct Duties and Taxes
- Penalties depend on degree of culpability: negligence, gross negligence, and fraud.
- Penalty computations involve revenue loss percentage applied with multipliers:
- Negligence: 0.5 to 2 times revenue loss.
- Gross negligence: 2.5 to 4 times revenue loss.
- Fraud: 5 to 8 times revenue loss.
- Commissioner of Customs may compromise fines, except in fraud cases, for voluntary, full disclosure before audit starts.
- Decisions imposing penalties are appealable to the Court of Appeals under relevant TCCP provisions.
Confidentiality Clause
- Information confidential by nature or obtained confidentially during audits must be strictly protected.
- Disclosure only allowed with consent or for judicial proceedings.
- Violations subject to prosecution as per the Tariff and Customs Code provisions.
Criminal Prosecution and Judicial Remedies
- Criminal cases may be pursued alongside administrative sanctions under relevant TCCP sections.
- Remedies may include court orders against importers/brokers and contempt punishments.
- Prosecutions conducted in the government’s name by Customs Officers; probable cause determination reserved for DOJ prosecutors or authorized officials.
- Filing of civil or criminal cases requires Commissioner of Customs' approval.
Procedures for Imposition of Administrative Penalties
- Fiscal Intelligence Unit (DOF-FIU) conducts initial determination of penalties post-audit.
- Final Audit Report and Recommendation (FARR) includes penalty recommendations with supporting documents.
- FARR forwarded to Commissioner of Customs for determination and hearing as per TCCP requirements.
- Importers/brokers may be requested to provide additional information within 15 days.
- Upon acceptance, Commissioner issues collection or formal assessment letter requiring payment within 10 working days, may order hold on imports.
- Importers have 30 days to appeal to the Court of Tax Appeals.
Indicators of Negligence, Gross Negligence, and Fraud
- Negligence: failure to ensure accuracy and compliance causing deficiencies.
- Gross negligence: serious disregard or knowledge of violations, factoring gravity and extent.
- Fraud indicators include misleading replies, unauthorized withdrawals, failure to file required reports, mismarked documents, misclassification, suspicious recordkeeping, document inconsistencies, habitual violations, among others.
Mitigating and Aggravating Circumstances
- Mitigating factors: government contributory error, cooperation, corrective action, prompt payment, no prior offenses, and similar circumstances.
- Aggravating factors: delayed compliance, obstructing proceedings, prior violations, and analogous circumstances.
- These factors influence determination of culpability and penalty severity.
Repealing Clause
- All inconsistent prior issuances are repealed or modified accordingly.
Separability Clause
- If any part is declared unconstitutional or invalid, remaining provisions remain effective.
Effectivity
- The order takes effect immediately upon publication.
Approved by the Secretary of Finance and signed by the Commissioner of Customs.