Disposal Method in Absence of Special Law
- Articles under customs custody are to be disposed of through public auction unless special law provides otherwise.
Determination of Floor Price in Auction
- Floor price shall not be less than the wholesale value based on canvassed domestic wholesale prices of similar articles.
- Determined by examiners/appraisers and approved by Chief, ACDD, and District Collector.
- Floor price cannot be below total landed cost plus taxes, considering obsolescence, condition, and depreciation.
Notice of Public Auction Requirements
- Prepared by Chief, ACDD, approved by District Collector.
- Must include specific time, date, place, lot numbers, detailed description of goods including quality, condition, quantity, date of arrival.
- Motor vehicles require Year Model, Make/Brand, VIN, Chassis, Engine Numbers.
- For perishables, expiry dates must be shown.
- Floor prices and terms and conditions of auction also specified.
Submission to Commissioner for Monitoring
- Copy of approved Notice of Sale furnished to Commissioner of Customs.
- Documents including inventory of lots, Certificate of Finality of Forfeiture/Abandonment or Order to sell, and certification for perishables submitted.
Publication and Posting of Notice
- Published in at least two newspapers of general circulation.
- Posted on Bureau website and conspicuous places within the port at least 10 days prior to auction; at least 3 days for perishables.
- Notice posted in city/municipal hall bulletin boards except in main cities Manila, Cebu, Cagayan de Oro, and Davao.
Registration and Participation Conditions
- Registration form filing and non-refundable Php2,000 fee required.
- Posting of cash or manager's check bond equal to 20% of floor price per lot (not required if floor price is below Php10,000).
- Proof of qualification for regulated commodities like rice, sugar.
- Registration details logged, including TIN and tax return proof validated by BIR.
Sealed Bid System
- Bids submitted sealed and opened publicly.
- Highest bid declared winner unless clustering occurs.
Clustering Rules
- Occurs when highest and second highest bids are within 10% difference.
- Open bidding among top bidders conducted, with bids raised must be at least 3% above new floor price.
- Highest bid after open-bidding declared winner; if none, highest sealed bid wins.
Awarding of Sale and Payment Terms
- Winning bidder pays 50% of bid price immediately in cash or manager's check.
- Remaining balance paid on next business day.
Declaration of Failed Bidding
- Failed bidding if only one bid (not opened), or two bids with only one above floor price.
- Non-compliance with payment disqualifies highest bidder and may result in forfeiture of bond and penalties.
Second Bidding Procedure
- Held on third business day after first failed auction at same floor price without further advertisement.
- For perishables, held on first business day after failed auction.
Negotiated Sale After Failed Bids
- Second failed bidding lot offered through negotiated sale.
Reporting on Second Failed Bidding
- District Collector must report to Committee on Negotiated Sale within 48 hours; 24 hours for perishable articles.
- Report includes bid abstracts, proof of publication, certifications of failed biddings, and other requirements.
Committee on Negotiated Sale Composition and Duties
- Chaired by Deputy Commissioner, Internal Administration Group.
- Members include OCOM and DOF representatives.
- Duties: implement negotiated sale rules, inspect lots, reject or accept offers favoring government interest, recommend offers to Secretary of Finance.
- Secretariat manages publications, postings, records, and committee proceedings.
Negotiated Sale Requirements and Procedures
- Submission of sealed offer, TIN, registration fee receipt, latest tax returns, and proof of qualification for regulated commodities.
- No minimum prices; offers must be timely.
- Guarantee cash deposit of 20% of offer due within 24 hours after committee notice.
- Additional 30% due within 48 hours after Secretary of Finance approval; remaining 50% due next business day.
- Failure to comply results in disqualification and forfeiture.
- Rejected offers refunded; unsold lots re-bidded or disposed of per TCCP provisions.
Interim Provision
- All lots pending on third or more advertisements referred to Committee on Negotiated Sale.
Repealing Clause
- Previous related customs orders and rules inconsistent with this Order are repealed or amended accordingly.
Effectivity
- The Order takes effect 15 days after its complete publication in two newspapers of general circulation.