Guidelines on Insurance and Freight in Customs Valuation

Airway Bill (AWB): Non-negotiable document evidencing contract of carriage by air.
Bill of Lading (B/L): Negotiable document denoting receipt and title to goods.
Incoterms (CFR, CIF, CIP, FOB): Terms defining responsibilities for costs, freight, and insurance between seller and buyer.
House Air Way Bill (HAWB) & Master Airway Bill (MAWB): Shipping documents issued by freight forwarders and consolidators.
IATA: International agency standardizing airfares.
IEIRD (Import Entry and Internal Revenue Declaration): Official import clearance document.
Insurance Premium: Payment to insurer covering indemnity for cargo loss or damage.
Local Insurance Premium: Payment to Philippine-based insurers when terms are CFR, FOB, FAS, or non-CIF.
Single Administrative Document (SAD): Uniform customs processing document.

Importer, declarant, and broker must accurately disclose actual freight and insurance costs.
Chief and Principal Appraiser or equivalent must verify accuracy and truthfulness of these declarations.
Customs officers must diligently perform duties; failure may lead to disciplinary actions.
District Collector responsible for effective implementation within jurisdiction.
All signatories to certificates/reports bear liability for misrepresentations under relevant penal provisions.

Insurance and freight charges are components of dutiable value under Section 201 of the Tariff and Customs Code.
If sale terms are CIF or CIP, actual insurance premium is assessed; minimum reference rate is 2% of FOB for general cargo and 4% for hazardous goods; amounts below this are subject to further verification.
Local insurance premiums accepted with required certification and official receipts attached; similar minimum rates apply.
Non-local insurance premiums accepted but subject to verification if below prescribed minimum rates.
Government imports covered by GSIS require submission of Marine Open Policy; alternative provisions apply if insured by other insurers or not covered locally.
Insurance amount to be declared in specified boxes of IEIRD and SAD documents.

Freight charge assessed based on amount in Airwaybill or Bill of Lading.
If no freight indicated, declared amount in IEIRD/SAD may be used but must not be less than 70% of published IATA (air) or conference (sea) rates; amounts lower than 70% require further verification.
Importers must present certification or official receipts if freight charges declared are low.
Bulk shipments require supporting documents such as Charter Party, Freight Contract, and Stowage Plan.
National Food Authority shipments may be accepted if freight is not less than 10% of CFR value.
Refrigerated shipments require certification from shipping lines; otherwise, specified minimum freight rate references by origin are provided (China, Hong Kong, Singapore, Los Angeles).
Freight for 20 ft refrigerated containers must be at least 50% of 40 ft container rate, else subject to verification.

Invalidity of any provision does not affect the remaining provisions which shall remain effective.

Previous Customs Memorandum Orders or memoranda inconsistent with this order are superseded, amended, or modified accordingly.

The Order takes effect immediately upon issuance and remains effective until revoked.