Legal basis and related issuances
- Executive Order No. 46 cites Executive Order (EO) No. 160 (s. 2003) for creation of the Post Entry Audit Group (PEAG) of the Bureau of Customs (BOC).
- Executive Order No. 46 cites EO No. 155 (s. 2013) for transfer of BOC-PEAG functions to the Fiscal Intelligence Unit (FIU) of the Department of Finance (DOF).
- Executive Order No. 46 invokes Republic Act No. 10863 (the Customs Modernization and Tariff Act (CMTA)), which mandates the BOC to conduct audit examination, inspection, verification, and investigation of transaction records.
- Executive Order No. 46 relies on Section 17, Article VII of the 1987 Constitution on the President’s power of control over executive departments, bureaus, and offices.
Reviving post clearance audit at BOC
- Section 1 transfers the post clearance audit function from the DOF-FIU to the BOC.
- Section 1 revives the operations of BOC-PEAG and renames it as the Post Clearance Audit Group (PCAG).
- Section 1 places the PCAG under the supervision of the Commissioner of Customs.
PCAG composition and staffing
- Section 2 provides that the PCAG is headed by an Assistant Commissioner (SG 28) of the BOC.
- The Assistant Commissioner (SG 28) is appointed by the President of the Philippines, upon recommendation of the Commissioner of Customs through the Secretary of Finance.
- The Assistant Commissioner exercises direct supervision and control over:
- the Trade Information and Risk Analysis Office (TIRAO); and
- the Compliance Assessment Office (CAO).
- Section 2 provides that TIRAO and CAO are each headed by a Director II (SG 26).
- Section 2 authorizes the Commissioner, with the approval of the Secretary, to determine personnel requirements and to issue orders to reassign organic BOC personnel to the PCAG.
- Section 2 authorizes the Commissioner, subject to economy, efficiency, and effectiveness, to recommend changes to PCAG personnel and staffing and, with the approval of the Secretary of Finance, submit them for DBM evaluation.
PCAG functions and audit coverage
Section 3 requires the PCAG to conduct an audit examination, inspection, verification, and investigation of records for any goods declaration.
Section 3 limits the audit to be conducted within three (3) years from the date of final payment of duties and taxes or customs clearance.
Section 3 directs the audit to ascertain the correctness of the goods declaration and determine the liability of the importer for duties, taxes, and other charges, including any fine or penalty.
Section 3 includes within “goods declaration”:
- statements, declarations, documents, and
- electronically generated or machine readable data.
The audit functions are distributed as follows:
TIRAO functions (Section 3):
- Section 3(a) requires review of available trade data to determine compliance markers of industry (or other data-grouping means) and set benchmarks for developing an audit program for the Commissioner’s approval.
- Section 3(b) requires, in coordination with the Management Information System and Technology Group (MISTG), development of a computer-aided risk-based management system whose parameters are based on objective and quantifiable data, subject to Secretary of Finance approval upon Commissioner recommendation, for profiling and identification of potential priority audit candidates based on the approved audit program.
- Section 3(c) requires recommendation of potential priority audit candidates for Commissioner of Customs approval.
- Section 3(d) requires development of policies, guidelines, manuals, and standard operating procedures relating to the audit process.
- Section 3(e) authorizes performance of other necessary or incidental functions to implement the Order, as provided by law.
CAO functions (Section 3):
- Section 3(a) requires preparation of the audit work plan, scope, and approach for approved priority audit candidates.
- Section 3(b) requires conduct of audit examination, inspection, verification, or investigation of records subject to applicable laws and the approved policies, guidelines, manuals, and standard operating procedures.
- Section 3(c) requires preparation and submission of required reports on audit findings and recommendations to the Commissioner of Customs for approval.
- Section 3(d) requires establishment and maintenance of a customs compliance program.
- Section 3(e) authorizes performance of other necessary or incidental functions to implement the Order, as provided by law.
DOF-FIU renamed as FAI unit
- Section 4 institutes and renames the DOF-FIU as the Financial Analytics and Intelligence (FAI) Unit.
- Section 4(a) requires the FAI Unit to act as the data analytic unit of the DOF for purposes of revenue management.
- Section 4(b) requires the FAI Unit to require, as it may deem necessary, attached DOF agencies, bureaus, and offices to submit all relevant trade and industry data related to revenue generation, subject to existing laws, rules, and regulations.
- Section 4(c) requires review of matters that may be fiscally adverse to the government, including matters elevated by attached DOF agencies, bureaus, and offices for approval and conformity of the Secretary of Finance.
- Section 4(d) requires providing recommendations to the Secretary of Finance on policies and actions based on the analysis of available data.
- Section 4(e) authorizes performance of other necessary or incidental functions to implement the Order, as provided by law.
Turn-over of pending audits to PCAG
- Section 5 directs that the DOF-FAS shall, as may be practicable, transmit to the BOC-PCAG all files and documents of any pending post clearance audits after the effectivity of the Order.
Funding and budget treatment
- Section 6 provides that funding requirements for the BOC-PCAG come from the applicable budget of the BOC.
- After sourcing from the applicable BOC budget, Section 6 requires that funding be included in the BOC budget proposal subject to the usual budget preparation process.
- Section 6 provides that the appropriation for the DOF-FIU, including its organization and staffing as approved by the DBM, is effectively retained for use of the DOF-FAI.
Separability, repeal, and non-invalidation
- Section 7 states that if any provision is declared invalid or unconstitutional, the remaining provisions continue to be valid and subsisting.
Repealing inconsistent rules
- Section 8 repeals, amends, or modifies all issuances, orders, rules, and regulations, or parts thereof, that are inconsistent with Executive Order No. 46.