Rules on Off-Quality Imported Goods

The Order is issued to address the resurgence and increase of shipments declared as stocklots, side-runs, cull rolls, seconds, mill lots, off-grade, B-grade, C-grade, used, second-hand, off-specs, sub-standard, off-quality, overruns, sweepings, overflow, recycled, “waste-waste”, reconditioned, refurbished, re-fashioned, surplus, scrap, scrap metals, metal waste, cut-up, bath-roll, odd lengths, unbranded, or other similar descriptions used to purport a condition or quality other than prime.
The Order seeks to prevent abuses in describing imported articles in the commercial invoice and/or entry declaration to avoid payment of the proper duties and taxes.
The Order protects the Government by ensuring collection of the proper duties and taxes due on articles passed off as substandard/off-quality but intended to be sold as brand new/prime quality in the market.
The Order protects consumer health and safety against prohibited, sub-standard, and/or hazardous products.

All shipments/importations declared in the shipping/commercial invoice and entry as stocklots, side-runs, cull rolls, seconds, mill lots, off-grade, B-grade, C-grade, used, second-hand, off-specs, sub-standard, off-quality, overruns, sweepings, overflow, recycled, “waste-waste”, reconditioned, refurbished, re-fashioned, surplus, scrap metals, metal waste, cut-up, bath-roll, odd lengths, unbranded, and other similar descriptive terms are covered.
The coverage applies to imports where the importer’s documentation declares the goods using analogous terms purporting a quality condition other than prime.

Covered shipments are required to undergo 100% examination in the presence of an FCCI/FPI technical expert pursuant to GMO 9-99.
Covered shipments are subject to clearance by the District Collector, who is the Principal Accountable Officer.
Covered shipments must be accompanied by a duly notarized Manufacturer’s and/or Supplier’s Certificate of Quality showing the actual condition/quality of the articles.
The Manufacturer’s/Supplier’s Certificate must indicate attributes/qualities in physical measurable terms, including:
- the standard for the product being imported; and
- the deviation from such standard that reduced quality.
The Manufacturer’s/Supplier’s Certificate must be authenticated by the Commercial Attache or Consulate at the Country of Origin as to the quality of the shipment, and not merely authentication of the genuineness of the signature; otherwise, the certificate is not considered by the Bureau.
Covered shipments are required to be subject to Laboratory analysis by the Philippine Customs Laboratory (PCL).
If PCL lacks the needed apparatus/equipment, PCL may indorse the articles or samples to DOST or other accredited laboratories for analysis.

In the absence of the requirements under Section II, sub-pars. 3, 4, and 5 (Certificate of Quality; its authentication as to quality; and laboratory analysis), the assessment is made using the VRIS Test Value or Published Reference Value for a prime quality article.
The assessment under this rule remains subject to the TCCP, CMO 64-93, and other applicable laws, rules, and regulations.

A nominal discount based on standard trade practice of the industry may be allowed only for shipments/articles found by the Ports to be sub-standard or off-quality.
The discount is based on the Customs Value of the brand new or prime quality article/s.
The allowable discount shall not exceed 30%.
The allowable discount applies only when the requirements under Section II, sub-pars. 3, 4 and 5 have been complied with.

The Principal Appraiser/Examiner, COO III, and the Chief of the Port’s Formal Entry Division (or its equivalent unit) must:
- check and verify the actual condition of the shipment; and
- verify the accuracy and truthfulness of the Manufacturer’s and/or Supplier’s Certificate of Quality submitted by the importer.
Failure of these officials and concerned personnel to perform their respective duties and responsibilities is a ground for disciplinary action under the Civil Service Rules and Regulations.
The District Collector and the Deputy Collector for Assessment are the principal accountable officers responsible for the effective implementation of the Order in all cases within their District jurisdiction.

CMO Nos. 14-95, 37-93, and 62-91 are repealed.
All other orders, rules, and regulations inconsistent with BOC Customs Memorandum Order No. 21-2008 are deemed repealed/amended accordingly.