Title
Rules on EO 133 Implementation - Customs Tariff
Law
Boc Customs Memorandum Order No. 3-2001
Decision Date
Mar 14, 2001
Customs Memorandum Order No. 003-01 outlines the procedures and requirements for qualifying for a zero percent rate of duty and availing of tariff exemption for agriculture and fisheries enterprises, with the District Collector of Customs responsible for its implementation.
rules and regulations
executive order
customs memorandum order

Legal basis and regulatory framework

  • The Order implements Executive Order No. 133, which modifies import duty rates to implement Section 109 of Republic Act No. 8435.
  • Executive Order No. 133 modifies rates of duty under Section 104 of Presidential Decree No. 1464 (Tariff and Customs Code of 1978).
  • Presidential Decree No. 1464 (as amended) also includes Section 401, which empowers the President, upon recommendation of the National Economic and Development Authority, to increase, reduce, or remove existing import duty rates and modify the form of duty.
  • The Order operates within the duty-modifying scheme of Republic Act No. 8435 and the tariff-exemption rules carried in Executive Order No. 133.

Policy, objectives, and implementation focus

  • The Order promulgates rules for the effective and orderly implementation of Executive Order No. 133.
  • The Order ensures the application of proper Harmonized System (HS) codes and rates of duties for articles enumerated in Annex "B" and Annex "C" of Executive Order No. 133.
  • The Order establishes a clear procedure for the transmittal and reception of documents needed to qualify a shipment for a zero percent (0%) rate of duty.
  • The Order establishes a procedure for customs offices to authenticate qualifying documents from the issuing/transmitting office.
  • The Order establishes a feedback mechanism to support reconciliation between issued and received documents among concerned offices (including the Department of Agriculture).

Coverage and scope rules

  • The Order applies to articles covered by Executive Order No. 133.
  • Articles in Annex "B" of Executive Order No. 133 are granted zero percent (0%) rate of duty up to 08 February 2003, and the rules under Annex "A" do not apply, including the requirements for Certificate of Eligibility or Certificate of Accreditation.
  • Articles in Annex "C" of Executive Order No. 133 are granted zero percent (0%) rate of duty up to 08 February 2003 and must follow the rules under Annex "A".
  • The Annex "C" list requires the importing enterprise to secure a Certificate of Eligibility (CE) or Certificate of Accreditation (CA) depending on eligibility and transaction structure.

Certificates: eligibility and accreditation

  • A Certificate of Eligibility (CE) is required for eligible agriculture and fisheries enterprises availing of incentives, and it must be presented to the Bureau of Customs.
  • The Department of Agriculture (DA) issues the CE through its Regional Field Units (RFUs), or through BFAR and its regional offices, or through CDA and its regional offices, or through DTI’s regional and provincial offices, or through BOI and its regional offices, as applicable.
  • A CE must contain the information required under Annex "A", Rule IV, Section 4 of Executive Order No. 133.
  • A Certificate of Accreditation (CA) is required for import consolidators that assist and represent eligible agriculture and fisheries enterprises unable to undertake direct importation due to small order sizes or lack of import experience.
  • The DA, through any of its RFUs, issues the CA.
  • A CA must contain the information required under Annex "A", Rule V, Section 5 of Executive Order No. 133.

Tariff exemption period and enterprise eligibility

  • Agriculture and fisheries enterprises certified by DA (in consultation with the Department of Finance and Board of Investments) are exempted from payment of tariff and duties for five (5) days after the effectivity of Republic Act No. 8435 for importation of all types of agriculture and fishery inputs, equipment, and machinery exclusively for importing enterprises.
  • For practical application under Executive Order No. 133, agriculture and fisheries enterprises can avail tariff exemption for importation of agriculture and fisheries input, machinery, and equipment listed in Annex "B" for five (5) years without CE or CA.
  • Agriculture and fisheries enterprises availing of tariff-exempt importation must apply for a CE from the DA or its deputized agencies for duty-free importations involving Annex "C".
  • An import consolidator represents and assists eligible agriculture and/or fisheries enterprises unable to directly import Annex "C" articles because of small requirements or lack of direct import experience.

Submission, document transmittal, and customs processing

  • Upon arrival of the articles listed in Annex "C" at the port of entry, the importer (enterprise) or import consolidator must include specific documents in the filing of the IEIRD to the Collector of Customs for processing as exempt from tariff.
  • The IEIRD submission must include:
    • Commercial Invoice
    • Bill of Lading
    • For agriculture/fisheries enterprises: original plus two copies of valid CE
    • For an import consolidator: original plus a copy of valid CA
  • In processing the import transaction, the customs office must record the required information on the CE and CA using the space provided, subject to CIF value limits:
    • For agriculture/fisheries enterprises: the CIF peso value of each import transaction must not equal or exceed the available balance of the total allowable peso value shown in the valid CE.
    • For import consolidators: the CIF peso value of each import transaction must not equal or exceed the total allowable peso value reflected in the CA required for the transaction.
  • The BOC retains a copy of the CE, forwards a copy of the CE to the DA central office, and returns the original CE to the agriculture/fisheries enterprise for future use; the original CA is also returned by the BOC to the DA Central Office.
  • All tariff-exempt importation remains subject to all existing import rules, regulations, and requirements, as applicable.

Assessment steps and authentication measures

  • Upon receipt of import entries covered by Republic Act No. 8435 / Executive Order No. 133, the COO IV assigns a COO III to process the entry.
  • For entries under the yellow lane, the COO III conducts documentary examination.
  • For entries under the red lane, processing includes documentary examination plus actual examination as an additional measure for high-risk shipments.
  • The COO III checks the correctness of the declared tariff heading against the tariff heading appearing in Annex "B" or Annex "C" of Executive Order No. 133.
  • If examination shows the shipment does not qualify under Annex "B" or Annex "C", the AFMA privilege is not granted, and the shipment must be classified and assessed accordingly.
  • The COO III registers the entry at the computer provided for that purpose.
  • If the shipment falls under Annex "C", the COO III verifies the authenticity of the CE (for agriculture/fisheries enterprises) and the CA (for import consolidators).
  • The COO III stamps on Box 31 at the back page of the entry, filled up by the officer, the following:
    • AFMA Annex ________
    • CE/CA No. _________
    • Description: ______________________________
    • Tariff Heading & Rate (followed by the space/format shown on the entry page)
  • The COO III accomplishes the attached Certificate of Eligibility and/or Certificate of Accreditation (referred to as Form No. IB part II).
  • All import entries filed availing of Republic Act No. 8435 / Executive Order No. 133 require clearance from the Office of the District Collector and the Bureau of Plant Industry and/or Bureau of Fisheries and Aquatic Resources, as applicable.

Certificate issuance timing and limits

  • The DA issues the CA within three working days from the time the issuing office receives the application, provided the documents referred to under Rule V, Section 3 are complete and in order.
  • The CA is not transferable.
  • A CA is valid only for single import transaction and remains valid for five (5) months.
  • If a CA is about to expire on the date of arrival of the imported article, it may be extended for another month upon re-application and surrender of the original CA to the same issuing DA office.

Operational responsibility and duration

  • The District Collector of Customs is responsible for the effective implementation of the Order.
  • The Order is adopted on 14 Mar. 2001 and remains effective until revoked.

Procedure for CE/CA documentation handling

  • For shipments covered by Annex "C", the importing agriculture/fisheries enterprise must use a valid CE and the import consolidator must use a valid CA in customs filing.
  • Customs processing requires recording and verification actions on CE/CA and entry documents, including stamp placement in Box 31 and execution of the corresponding certificate form (Form No. IB part II).

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