Amended Rules on Balikbayan Boxes Shipment

Legal Basis and Supersession Rules

CAO No. 01-2018 implements Section 800 (9), Chapter 1, Title VIII and Section 423, Chapter 3, Title IV of Republic Act No. 10863 (Customs Modernization and Tariff Act—CMTA), specifically for consolidated shipment of Balikbayan Boxes.
CAO No. 01-2018 specifically supersedes CAO No. 05-2016.
CAO No. 01-2018 is designed to operationalize the duty and tax exemption mechanics of Section 800 (g), Chapter 1, Title VIII of the CMTA for Balikbayan Boxes.

Policy and Objectives

CAO No. 01-2018 authorizes Qualified Filipinos While Abroad to send Balikbayan Boxes using simplified customs clearance rules.
CAO No. 01-2018 requires customs processing and monitoring through risk management and ICT-enabled systems consistent with the Bureau’s revenue collection and border protection functions.
CAO No. 01-2018 mandates clear, transparent customs rules consistent with international standards and customs best practices.

Core Definitions Established

Availment is the determination that Balikbayan Boxes are counted as first, second, or third within a calendar year and therefore entitled to duty and tax exemption under Section 800 (g) of the CMTA; any value above the allowable non-dutiable and non-taxable value is subject to duties and taxes.
A shipment above the De Minimis Value of Php10,000.00 is automatically considered one availment, and De Minimis importation is excluded from the availment count, with the rule that the Qualified Filipinos While Abroad can only send to one ultimate consignee in one consolidated shipment.
Balikbayan Box is a corrugated box or other container up to a maximum volume of 200,000 gross cubic centimeters without regard to shape; it must contain only personal and household effects, not in commercial quantities, and not intended for barter, sale, or hire.
Calendar Year means January 1 to December 31 of the same year.
Commercial Quantity is the quantity for a given kind or class of articles exceeding what is compatible with and commensurate to the person’s normal requirements for personal use.
Consolidated Cargo Manifest is the true and correct manifest of all individual shipments/consignments in a consolidated shipment, attached as a rider to the Inward Foreign Manifest.
Consolidated Shipments are two (2) or more shipments from two (2) or more individual consignors/senders consolidated and shipped together under one master ocean bill of lading or master air waybill by a consolidator to its deconsolidator in the Philippines.
Consolidator is a foreign-registered forwarding company acting as an NVOCC, which issues house bills/air waybills in its name, assumes common carrier liabilities for transportation from receipt to destination, and ships the goods under a master bill/air waybill consigned to its deconsolidator or freight forwarder.
Deconsolidator is an agent situated at the country of importation that deconsolidates shipments to facilitate distribution; it may also be a breakbulk agent.
De Minimis Value is the value of goods for which no duty or tax is collected.
Family and Relatives covers relatives up to the fourth (4th) civil degree of consanguinity or affinity.
House Air Waybill (HAWB) and House Bill of Lading (HBL) cover single individual shipments/consignments issued by the freight forwarder to the consignor/sender, containing sender/receiver names and detailed descriptions of the goods.
Household Effects covers furniture, dishes, linens, libraries, and similar household furnishings for personal or family use.
Master Air Waybill (MAWB) and Master Ocean Bill of Lading (MBL) are issued by the common air carrier/ocean carrier to the consolidator covering the consolidated shipment.
Non-Vessel Operating Common Carrier (NVOCC) publishes its own freight tariff, issues its own bills of lading, assumes responsibilities of a common carrier without operating its own vessels.
Non-Resident Filipinos are Filipinos with permanent residency abroad retaining Filipino citizenship, whether or not they availed of benefits under Republic Act No. 9225.
Overseas Filipino Worker (OFW) is a holder of a valid DFA passport and certified by DOLE or POEA for overseas employment purposes, covering all Filipinos working abroad under employment contracts; it also covers Filipinos working abroad under job contracts that do not require DOLE/POEA certification.
Qualified Filipinos While Abroad collectively includes Non-Resident Filipinos, OFWs, and Resident Filipinos.
Regulated Importation refers to goods subject to regulation that may be imported or released only after securing necessary clearances, permits, licenses, and other requirements.
Resident Filipinos are resident Filipino citizens temporarily staying abroad, including holders of student visa, investors’ visa, tourist visa, and similar visas allowing temporary stay.
Ultimate Recipient or Consignee is the family member or relative of the sender who is the ultimate beneficiary of the Balikbayan Box.
Personal Effects are commodities new or used, for personal use or consumption and not for commercial purposes (e.g., wearing apparel, personal adornments, electronic gadgets, toiletries, or similar items).

Coverage and What the Rules Apply To

CAO No. 01-2018 covers consolidated shipments of Balikbayan Boxes entered through any port of entry and destined for families or relatives in the Philippines sent by Qualified Filipinos While Abroad.
CAO No. 01-2018 does not cover Balikbayan Boxes brought in by means other than consolidated shipments, which are governed by a different CAO; such shipments still count toward frequency of availment under Section 800 (g) of the CMTA.
CAO No. 01-2018 authorizes duty and tax exemption for Balikbayan Boxes sent by Qualified Filipinos While Abroad up to three (3) times in a calendar year.
A consolidated shipment of Balikbayan Boxes treated as one shipment, regardless of the number of ultimate consignees and the number of Balikbayan Boxes in the consolidated shipment covered by one master bill of lading or master air waybill, counts as one availment for frequency purposes.
CAO No. 01-2018 includes Balikbayan Boxes brought in as accompanied or unaccompanied baggage by passengers in counting availment.
A shipment with value above the De Minimis Value of Php10,000.00 is automatically considered one availment.
The exemption is limited to Qualified Filipinos While Abroad; sole proprietorships and juridical entities (including cooperatives, corporations, and partnerships) are not qualified to avail of the benefits.

Substantive Requirements for Exemption

Balikbayan Boxes must contain personal and household effects only, must not be in commercial quantities, and must not be intended for barter, sale, or hire.
Total FCA value for all Balikbayan Boxes per sender in any calendar year must not exceed Php150,000.00.
The duty and tax-free importation under CAO No. 01-2018 is limited to Qualified Filipinos While Abroad.
The Bureau must establish a monitoring system to ensure the exemption is availed up to three (3) times only per calendar year.
When a consolidated shipment is subject to alert or enforcement intervention, individual boxes found to violate CMTA provisions are segregated and processed accordingly, while compliant boxes must be released immediately.
The Bureau must adopt ICT-enabled systems for processing Balikbayan Boxes and monitoring availments.

Processing Charge and ICT Monitoring

CAO No. 01-2018 imposes a processing charge of Php125.00 per house bill of lading/house air waybill for availment of the tax and duty exemption under Section 800 (g) of the CMTA.
The Php125.00 processing charge is inclusive of customs documentary stamps of Php15.00 and legal research fee of Php10.00.
The Commissioner may periodically review the processing charge and revise it based on prevailing costs.
The Bureau must implement a registration system and/or database of Deconsolidators, Qualified Filipinos While Abroad, and their families/relatives as ultimate recipients/consignees who may enjoy the exemption.
Availment counting must follow the rule that shipments with more than Php10,000.00 De Minimis Value count as one availment, and shipments sent to only one ultimate consignee in one consolidated shipment fit the availment rule tied to De Minimis treatment.

Information Sheet and Sender Documents

Qualified Filipinos While Abroad must ensure that only personal effects and household goods are sent through consolidated shipments of Balikbayan Boxes.
Qualified Filipinos While Abroad must accomplish, sign, and submit the Information Sheet designed by the Bureau and attached as an annex to a CMO to be issued by the Commissioner.
The Information Sheet serves as the packing list and must contain:
- Complete name of shipper/sender, date of birth, citizenship, passport details, address abroad and in Philippines, contact number and e-mail address;
- Relationship of shipper/sender to consignee;
- Contact number, postal and e-mail address of the consignee;
- Total value of contents and number of Balikbayan boxes;
- Itemized listing of all goods in each Balikbayan Box and their quantities and description;
- Number of Availments within the calendar year; and
- Other essential information as required by the Bureau.
Qualified Filipinos While Abroad must submit the following documents:
- Photocopy of documents showing Qualified Filipino citizenship, full name (First Name, Middle Name, Surname & Suffix), date of birth, and place of birth, including the appropriate passport and proof of status/IDs:
  - Pertinent Philippine passport page with personal information, picture, and signature; or for dual Filipino citizens without Philippine passport, foreign passport photocopy with personal information, picture, and signature plus proof of dual citizenship;
  - Permanent Resident ID or equivalent document in other countries (e.g., Green Card, IQAMA);
  - Overseas Employment Certificate (OEC) / OWWA Card;
  - Work Permit;
  - Unified Government ID issued by DOLE;
  - Any other equivalent document (except Birth Certificate), including:
    - Any Philippine Government-issued ID stating Filipino citizenship; and
    - Any foreign government-issued ID showing full name, date of birth, place of birth, and Filipino citizenship.
- Invoice, receipt, or equivalent document covering the goods in the Balikbayan Box, if available.
The sender must submit the required documents to the Consolidator, who must transmit the Information Sheet and supporting documents to the Deconsolidator in a secured electronic format before arrival of the goods in the Philippines and within the period prescribed by the CAO for Deconsolidators’ transmission obligations.

Deconsolidator Registration, Transmission, Facilities

Deconsolidators (or Freight Forwarders acting as Deconsolidators) must apply for registration with the Bureau and submit:
- A duly filled-up application form; and
- A copy of the Service Contract with the Consolidator and all annexes.
Deconsolidators must ensure their principals abroad are aware of the need for senders to provide information and documents required under Section 5.1.2 to enable expeditious processing of deconsolidated goods.
Deconsolidators must transmit to the Bureau the Information Sheet and supporting documents in a secured electronic format before arrival and within specified timeframes from departure of the carrying vessel for consolidated shipments by sea:
- Three (3)-day shipping time: Twenty-four (24) hours prior to arrival;
- Seven (7)-day shipping time: Forty-eight (48) hours prior to arrival;
- From America, Europe, Middle East, and other parts of the world whose shipping time does not fall under the above: Ten (10) days prior to arrival.
For shipments carried by aircraft, Deconsolidators must transmit:
- Those coming from Asia: 1 hour before arrival;
- Those coming from other countries: 6 hours before arrival.
Within one year from effectivity of CAO No. 01-2018, each Deconsolidator must establish its own Customs Facility and Warehouse (CFW) equipped with CCTVs and a baggage X-ray machine for examination as required by the Bureau.
The installation of the x-ray machine depends on the Deconsolidator’s scale, volume of importation, or capitalization.
Port operators, Deconsolidators, or third parties may establish and maintain their own baggage x-ray facilities under service arrangements agreed between the facility operator and the client-Deconsolidator.
All baggage x-ray facilities must remain under the control and supervision of the Bureau, and only trained BOC personnel may operate the baggage x-ray machines.

Due Notice Requirements for Unfiled or Unclaimed Goods

For consolidated shipments where no goods declaration has been lodged or goods remain unclaimed, the Bureau must identify the individual consignees and their addresses and send a Notice to File Entry or Claim within fifteen (15) days from receipt of the notice.
The Bureau must prescribe in a Customs Memorandum Order (CMO) the rules and procedures for individual release of Balikbayan Boxes by their respective consignees and for lodgement of the goods declaration within the required period.
The Deconsolidator must answer for Bureau charges incurred such as government storage, arrastre, shipping demurrage, stripping and stuffing charges, and other incidental expenses not otherwise chargeable to the Forfeiture Fund, in case of implied abandonment of the goods.
Failure to comply with the Deconsolidator’s obligations under the due notice framework constitutes a ground for sanctions under CAO No. 01-2018.

Sanctions and Penalties for Violations

Violations are subject to sanctions imposed after due notice and hearing.
Acts constituting violations include misuse of Balikbayan Box duty and tax-exempt privilege as a conduit for smuggling or other fraud against customs by the Deconsolidator and participants.
For conduit smuggling/fraud, sanctions include:
- Fines provided under Section 1401 of the CMTA;
- Criminal prosecution under Title XIV of the CMTA; and
- Cancellation of registration as Deconsolidator or Freight Forwarder acting as Deconsolidator, as applicable.
The imposition of conduit-smuggling penalties is on a per HBL or HAWB basis and does not prejudice actions of the Fair Trade Enforcement Bureau of the Department of Trade and Industry (FTEB-DTI) and the Civil Aeronautics Board (CAB) to blacklist under their rules.
Failure of the Consolidator to provide required basic information results in sanctions on a per offense basis:
- First Offense: Warning;
- Second Offense: Php100,000.00;
- Third Offense: Php200,000.00;
- Succeeding Offenses: Php300,000.00.
Failure of the Deconsolidator or broker to lodge the goods declaration or to claim the goods within the prescribed period results in sanctions:
- First Offense: Php100,000.00;
- Second Offense: Php200,000.00;
- Third Offense: Php300,000.00 and cancellation of registration.
Failure to comply with any other obligations defined in CAO No. 01-2018 results in escalating sanctions:
- First Offense: Warning;
- Second Offense: Php100,000.00;
- Third Offense: Php200,000.00 and six (6) months suspension of registration;
- Fourth Offense: Php300,000.00 and cancellation of registration.
The penalties in Section 6.2 to 6.4 are imposed on a per MBL or MAWB basis and do not prejudice FTEB-DTI and CAB blacklisting actions.

Exclusions from Duty/Tax Exemption and Simplified Clearance

Shipments are excluded from duty and tax exemption and/or simplified clearance procedure when:
- The Balikbayan Box contents’ FCA value exceeds Php150,000.00;
- The Qualified Filipino While Abroad’s total availments for any calendar year exceeds Php150,000.00, even if the maximum number of availments per year is not exceeded;
- The Qualified Filipino While Abroad has availed of the privilege three (3) times in a calendar year even if total for all availments does not exceed Php150,000.00;
- Goods are in Commercial Quantity, except when qualified as De Minimis importation;
- Goods are Regulated Goods in Commercial Quantity;
- The shipment includes donations;
- The container is mixed with other types of goods (including donations, commercial and regulated goods, and goods for temporary admission);
- The sender fails to comply with any obligation enumerated under Section 5.1.2.

Data Privacy Compliance

Consolidators, Deconsolidators, Freight Forwarders acting as Deconsolidators, and other concerned parties must comply with Republic Act No. 10173 (Data Privacy Act of 2012), particularly regarding collection and security of personal information.

Additional Regulations and Periodic Review

The Bureau must issue a CMO to:
- Prescribe the format of the Information Sheet and the Goods Declaration;
- Provide detailed procedures for lodgement, processing, and clearance of consolidated shipments of Balikbayan Boxes;
- Prescribe parameters for installation of baggage x-ray machines at the Deconsolidator’s CFW;
- Prescribe additional requirements for Deconsolidator registration; and
- Provide other details necessary for effective implementation of the CAO.
Unless otherwise provided, CAO No. 01-2018 must be reviewed every three (3) years and amended or revised when necessary.

Separability Rule

If any part of CAO No. 01-2018 is declared unconstitutional or contrary to existing laws, the remaining parts remain in full force and effect.