Legal basis and governing framework
- The order is issued pursuant to Section 4(c) of Executive Order No. 514.
- The rules implement the Memorandum of Understanding (MOU) among Philippine Shippers’ Bureau (PSB), Bureau of Customs (BOC), Maritime Industry Authority (MARINA), and Civil Aeronautics Board (CAB).
- The order coordinates implementation through the PSB as a lead agency with BOC, MARINA, and CAB.
Policy and purpose for accreditation
- The State must facilitate and assist the development and growth of Philippine trade and the national economy.
- The State must do so by enhancing the legitimate interests of Philippine shippers.
- The PSB must promote and professionalize the freight forwarding industry through registration and accreditation.
- The PSB must establish conditions to promote free competition in the freight forwarding industry for better services to exporters/shippers.
- The PSB must coordinate implementation of the MOU to carry out these measures.
Key definitions established by the rules
- A Memorandum of Understanding is the MOU entered into among PSB, BOC, MARINA, and CAB.
- Registration is certification that an applicant/enterprise complied with basic industry requirements and demonstrated professional and financial competence, making it reliable and capable to service export and import trades.
- A Certificate of Registration is the PSB-issued document certifying that an entity is registered for transacting business with parties to the MOU.
- The Registration and Monitoring Committee (RMC) is composed of regular representatives from MARINA, BOC, CAB and PSB; it is assisted by representatives from DTI recognized freight forwarding industry association, an association of exporters/shippers, an industry expert, and a Secretariat whose members are appointed by the PSB Director.
- A Freight Forwarder is a cargo intermediary enterprise that procures transport on behalf of its customer without assuming the role of carrier, including by booking ship space, negotiating freight rates, preparing documents, advancing freight payments, and providing trucking and warehousing and related undertakings.
- An NVOCC is a transport enterprise that publishes its own freight tariff, issues its own bills of lading, and assumes all responsibilities of a common carrier without operating its own vessels.
- A Cargo Consolidator is a company or person that groupages small (LCL) shipments for single or various consignors/consignees by procuring vessel/container space from carriers and issuing its own bills of lading or equivalent.
- A Shipper includes an exporter/importer, cargo owner, freight forwarder, and cargo consolidator.
- A Breakbulk/Consolidation Agent is the Philippine agent representative of a freight forwarder/consolidator named in a master bill of lading as shipper/consignee of a consolidated shipment.
- The PSB is the implementing agency and MOU signatory that acts as implementing agency.
- PISFA is the Philippine International Seafreight Forwarders’ Association, recognized by DTI and PSB, and a member of FIATA based in Zurich, Switzerland.
- Minimum Paid-Up Capital is the capital required for each registration/accreditation category, defined as unimpaired net equity at least equal to the prescribed minimum, not impaired by operating losses or long-term liabilities or other factors affecting net equity upon application.
- An RMC Identification Card is issued by the RMC through PISFA to duly authorized representatives of accredited entities as proof of authorization to transact business with the BOC.
Coverage, scope, and when registration is required
- No non-vessel operating common carriers, cargo consolidators, freight forwarders, and breakbulk agents may transact business with the BOC unless first registered by the PSB.
- All freight forwarders, NVOCCs, cargo consolidators, including breakbulk agents that are actually engaged in cargo forwarding business must apply for registration with the PSB Registration and Accreditation Division upon the MOU’s effectivity.
- Covered entities must apply for renewal in accordance with the rules.
- Registration applies whether or not an applicant is a PISFA member.
- A certificate is issued on a per category of business operation basis; no certificate issues until all requirements are submitted.
Registration application requirements and fees
- Every applicant must submit a written application and the listed documentary requirements.
- Corporations and partnerships must submit:
- List of company officers/directors and their residential addresses.
- Proof that the Chief operating officer or operations manager has at least two (2) years experience in shipping, freight forwarding and/or related activities, subject to RMC evaluation.
- Audited Financial Statement (latest Income Statement and Balance Sheet with supporting schedules) showing a minimum paid-up capital certified by the SEC, with the following paid-in capital requirements by nature of transport operation:
- NVOCC: P500,000.00
- Cargo Consolidator: P400,000.00
- Freight Forwarder: P300,000.00
- Breakbulk Agent: P250,000.00
- List of agents/offices abroad and a copy of their existing contract and/or agency agreement.
- Company profile including:
- SEC certificate of incorporation.
- Articles of Incorporation and by-laws where the nature of business operation is specifically provided in the primary purpose; for NVOCC applicants lacking specific NVOCC authorization in the Articles, the applicant must file an amendment with the SEC; upon submission of the amendment application, accreditation is granted without waiting for final SEC approval, conditioned on submission of the duly approved amended Articles within ninety (90) calendar days.
- Bio-data/personal sheets of directors and principal officers, and 2 passport size ID pictures each of principal officers.
- Inventory of transport equipment, or contracts with trucking company/ies.
- List of major clients.
- Proof of insurance coverage for the following amounts:
- NVOCC: P500,000.00
- Cargo Consolidator: P400,000.00
- Freight Forwarder: P300,000.00
- Breakbulk Agent: P250,000.00
- Single proprietorship applicants must submit:
- Bio-data/personal data sheet of applicant and 2 passport size ID pictures of applicant and principal officers.
- Proof of at least two (2) years experience in shipping, freight forwarding and/or related activities, subject to RMC evaluation.
- List of equipment and facilities.
- Latest Income Tax Return for two (2) consecutive years.
- Proof of financial resources (e.g., Real Estate Title/Certificate).
- Vehicle registration papers.
- List of agents/principals.
- Certificate of Business Name Registration.
- For capital deficiency: if the single proprietor has at least 80% of the paid-in capital requirement, the applicant may apply by posting a performance surety bond equivalent to two (2) times the amount of deficiency with the PSB as assignee; the bond is good only for one (1) year, after which the applicant/entity must meet the paid-in capital requirement; a partnership or corporation may not post a bond to cover capital deficiencies.
- Proof of insurance coverage for the following amounts:
- NVOCC: P500,000.00
- Cargo Consolidator: P400,000.00
- Freight Forwarder: P300,000.00
- Breakbulk Agent: P250,000.00
- Branch office accreditation: a duly accredited entity may establish a branch office anywhere in the country, and the branch office is automatically accredited upon:
- payment of a filing fee equivalent to twenty-five percent (25%) of the filing fee required for the mother office; and
- submission of information regarding the branch office’s bio-data and manager’s details including two (2) passport-size pictures, provided the manager meets the experience requirements under the rules.
- Cargo Consolidator (CC) and NVOCC additional requirement: applicants must have their own bill of lading using their own name and address.
- Proof of insurance must be satisfied by submitting:
- the original copy of the policy and the official receipt covering premium payment; and
- for T/T Club policy holders, a certified copy of the policy and official receipt in lieu of the original copy.
- Large multi-division companies: if the applicant is a division of a big company with several divisions, it must submit financial statements for the entire company plus a separate Profit Center statement of income and expenses applicable to the freight forwarding operations.
- Clearances: applicants must have no pending case with the Bureau of Customs and no unpaid taxes to the government; applicants must secure and submit clearances from both the BOC and the Bureau of Internal Revenue.
- Filing and processing fee: every registration applicant must pay P3,000.00; an additional P1,000.00 is collected for every new category applied for.
- When an application is deemed filed: an application is deemed filed upon payment of the filing fee and submission of all documentary requirements.
Application processing, inspections, and RMC actions
- Within fifteen (15) working days from receipt of the application and all requirements including proof of payment, the PSB Registration and Accreditation Division must evaluate and inspect the applicant’s offices, equipment, and relevant documents and recommend approval or denial to the RMC.
- During documentary evaluation, the PSB may request clarificatory statements; the applicant must answer in writing within five (5) calendar days from notice.
- The reglementary processing period is deemed suspended when clarificatory statements are required and no answer is submitted; upon submission of the answer, the period resumes.
- The RMC, through the PSB Director, issues and signs the corresponding Certificate of Registration after full payment of required fees and satisfactory compliance with requirements.
- Inspection prior to approval: before approval of registration/renewal, PSB Inspection Team must inspect premises and pertinent documents.
- PSB Inspection Team may also conduct inspections after approval to monitor NVOCCs, Cargo Consolidators, Freight Forwarders, and Breakbulk Agents, when necessary.
- Inspections are conducted by a team of at least two (2) members of PSB staff upon written instruction/authorization of the PSB Director or authorized representative.
- During inspection, the manager or any officer of the company-applicant must be present.
- Inspection reports must be submitted to the PSB Director within twenty-four (24) hours after inspection.
- Violations discovered during inspection for non-compliance with the rules and other applicable issuances may be grounds for appropriate sanctions or for denial of registration application.
Insurance types and required amounts
- Insurance coverage for registration/accreditation must be either:
- Merchandise in Transit (Floater); or
- Through Transport (TT) Club Insurance.
- MIT (Floater) insurance must cover:
- Truck Risks Plus Robbery and Hijacking (Standard Coverage); plus
- losses and damages due to loading and unloading; plus
- losses and damages while the vehicle is on stop overnight at an allowed territory.
- TT Club Insurance is the standard comprehensive cargo liability insurance for freight forwarders and transport operators covering destinations between the Philippines and worldwide.
- The insurance policy amount must be the amount prescribed for the applicant’s category/classification under Rule III Section 1 paragraph 5 and Section 2 paragraph 9, applying to both corporations and single proprietorships.
Validity, renewal timing, and automatic approval
- A certificate is valid for two (2) years from the date of issue, unless sooner cancelled or suspended by the Committee upon recommendation by the PSB for violation of rules or non-compliance with requirements.
- Renewal applications must be filed forty-five (45) calendar days before the certificate expires and must be supported by the same requirements as original applications.
- All original and renewal accreditation applications must be processed within twenty-one (21) working days from the date of filing.
- If no action is taken or processing is not completed within twenty-one (21) working days, the application is deemed approved and the applicant is entitled to issuance of certificate.
- Renewal submitted not later than forty-five (45) working days before expiration falls under the renewal process timing; renewal filed not later than fifteen (15) working days prior to expiration falls under the express lane unit.
- The express lane unit renewal fee is P4,500.00 instead of the usual P3,000.00 when filed not later than fifteen (15) working days prior to expiration.
- Entities with expired accreditation are treated as late and are charged P6,000.00.
- Within fifteen (15) working days from receipt of renewal application, the PSB Registration and Accreditation Division must evaluate and inspect and then recommend grant or denial to the Committee.
General rules on certificates and post-accreditation duties
- One certificate per category: one (1) certificate is issued for each category applied for, and no certificate issues until all requirements are submitted.
- Cancellation, revocation, or suspension: a certificate may be cancelled, revoked, or suspended for rule violations after due notice and hearing.
- Non-transferability: a certificate cannot be transferred, conveyed, or assigned and cannot be used directly or indirectly by anyone other than the entity in whose favor it was issued.
- RMC identification cards:
- Personnel identification cards are issued to official representatives of accredited entities authorized to transact with the BOC.
- Accredited freight forwarders must submit names and passport-size ID photos of authorized representatives, with a maximum of three (3) per category of operations.
- PSB charges a processing fee of P150.00 per ID Card.
- ID cards are valid for two (2) years.
- Change of ownership:
- Transfer or change of ownership of a registered single proprietorship automatically revokes the certificate; the new owner must apply for registration under the rules.
- A change in partners in a registered partnership that materially interrupts business or results in actual dissolution also automatically revokes the certificate.
- Change of directors: changes in a corporation’s board of directors must be registered with the PSB Registration and Accreditation Division within thirty (30) days from the date the change is decided or approved.
- Change of officers and agents: changes of officers or agents abroad and termination or appointment of key personnel must be registered with PSB within thirty (30) days from the date of change, appointment, or termination.
- Failure to renew: covered entities that fail to renew must be immediately delisted and disallowed from conducting business with the government signatory to the MOU upon expiration.
- Monthly list of accredited entities:
- The Registration and Accreditation Division keeps and updates the list regularly.
- The list is furnished to the BOC, Philippine Embassies abroad, and other government offices needing it.
- Performance evaluation: the Committee, through the PSB Registration and Accreditation Division, evaluates performance of NVOCCs, cargo consolidators, accredited freight forwarders, and breakbulk agents for monitoring.
- Manifest submission: PSB may require covered entities to submit copies of all inward and outward manifests covering consolidated shipments to protect shippers and consignees.
- Cancellation/revocation/suspension procedures: rules of procedure govern cancellation, revocation, suspension, and filing of appeals of accredited entities.
Committee powers and monitoring functions
- The RMC must monitor and periodically review implementation of the MOU.
- The RMC must formulate policies and programs to professionalize the freight forwarding industry.
- The RMC must deliberate and act on registration applications referred to it by the PSB for final action.
- The Committee and its Secretariat must meet regularly to assess overall MOU implementation.
Repeal, separation, and effectivity
- Provisions of the Revised Rules and Regulations Accreditation/Registration of Freight Forwarders, NVOCCs, Cargo Consolidators and Breakbulk Agents issued by the Philippine Shippers’ Bureau on 27 November 1992 that are inconsistent with these rules are revoked and/or amended accordingly.