Law Summary

I. Objectives

• Explanation: This section outlines the goals of the Memorandum of Agreement (MOA) between the Bureau of Customs (BOC) and the Land Transportation Office (LTO).
• Key Definitions:
  • Memorandum of Agreement (MOA): A formal agreement between two parties.
• Requirements/Procedures:
  • Implement guidelines for post entry audit on motor vehicles.
  • Promote compliance with customs and trade regulations per RA 9135.
  • Generate additional revenue by recapturing unpaid duties and taxes.
• Timeframes: N/A
• Consequences: Non-compliance may lead to adverse consequences for importers.

II. Scope

• Explanation: Defines the coverage and exclusions of the post entry audit.
• Key Definitions:
  • Completely Built Units (CBUs): Imported motor vehicles that are fully assembled.
• Requirements:
  • The Order applies to all imported brand new/used CBUs and vehicles assembled from imported parts.
  • Exclusions include vehicles under the Motor Vehicle Development Program, those imported by diplomatic missions, and trucks/buses covered by the DTI.
• Timeframes: Covers vehicles imported within three years prior to the MOA date (August 7, 2007).
• Consequences: Non-compliance with the scope may result in penalties or audits.

III. Administrative Provisions

• Explanation: Establishes the Certificate of Payment Verification Office (CPVO) to oversee audits.
• Key Definitions:
  • CPVO: A designated office for evaluating audit cases.
• Requirements:
  • The CPVO will consist of personnel from various BOC units, including the Post Entry Audit Group (PEAG) and the Value Reference Information System (VRIS).
• Timeframes: N/A
• Consequences: Inadequate evaluation may lead to loss of revenue.

IV. Operational Provisions

• Explanation: Details the operational procedures for conducting post entry audits.
• Key Requirements:
  • CPVO to conduct audits in accordance with RA 9135 and customs regulations.
  • If duties are properly paid, a clearance will be recommended; if not, a series of steps for deficiency assessment will be followed.
• Procedures:
  • Notify the LTO and the importer about deficiencies through registered mail.
  • Allow for reconsideration requests from importers, leading to re-evaluation.
  • Issuance of Warrant of Seizure and Detention (WSD) if duties remain unpaid post-audit.
  • Final clearance issued upon proof of payment.
• Timeframes:
  • Ten-day period for payment after receiving a demand letter.
• Consequences:
  • Non-payment may lead to seizure of vehicles and inability to register or renew registration with the LTO.

V. Separability Clause

• Explanation: Ensures that if any provision of the Order is deemed invalid, the remaining provisions remain effective.
• Consequences: Protects the integrity of the Order.

VI. Repealing Clause

• Explanation: States that previous inconsistent orders or regulations are repealed or modified.
• Consequences: Clarifies the authority of this Order over prior directives.

VII. Effectivity Clause

• Explanation: Specifies the Order's commencement date.
• Timeframes: This Order takes effect fifteen (15) days after its issuance (September 10, 2007).

Key Takeaways

• The BC Customs Memorandum Order No. 024-2007 establishes stringent guidelines for post entry audits of imported motor vehicles to enhance compliance and revenue collection.
• It outlines clear procedures for addressing compliance issues, including the issuance of demand letters and the potential for vehicle seizures.
• Importers must be aware of their obligations and the consequences of non-compliance, including penalties and restrictions on vehicle registration.