CUSTOMS Clearance

PROCEDURES

By : Danna Nicole Maraña Louvie Dieron

Import Letter of Credit Informal Entry ProceduresFormal Entry Procedures a. Consumption Entry b. Warehousing entrySimplified Export Procedures

Points of Discussion

Letter Credit

basically a guarantee or promise by a bank on behalf of the buyer to pay the seller a specified sum in the agreed currency, provided that the seller submits the required documents by a predetermined deadline.

Seller/Exporter

Beneficiary

Buyer / Importer

Application copy of L/C

FLOW CHART on IMPORT LETTER OF CREDIT ( L/C ) TRANSACTION

BPI Global City , Taguig

Applies L/C to Opening Bank

.

Opening / Issuing Bank

CITIBANK – New YorkAdvising / Negotiating Bank

Inquires the product & price lists …

INFORMAL ENTRY PROCEDURE

INFORMAL IMPORT DECLARATION AND ENTRY

Imported articles of a commercial in nature intended for sale, barter or hire

1. Which the dutiable value is PHP 2,000.00 or less ( Section 1302 TCCP) or Sample Items.

2. Personal and Household Effects or Articles not in commercial quantity and value :A. Imported articles in accompanied baggage by

passengers i. OFW ii. Returning ResidentsB. Consolidated shipments contained in balikbayan boxes thru an Int’l Freight Forwarding service.

The consignee may register himself / herself as a Once-A-Year Importer on accordance with CMO 44-2009 titled, “CPRS Registration of Once-A-Year Importer (previously First and Last Importation Scheme”)

Documents Required

Clearance of Single Consignee’s Shipment pursuant to CMO 10-91.Philippine Passport of an IndividualCertificate of Exemption, (letter of request to DOF ).

Clearance of Consolidated Shipment under CMO 54-89 and CMO 79.90.

Bill Of LadingPacking List

Packing List

Bill of Lading

.Permit to Deliver Imported Goods (B.C. Form No. 194.

Permit to Deliver Imported Goods (B.C. Form No. 194.

Informal Import Declaration and Entry (B.C. Form No. 177.

Single consignment

Consolidated

Office Documentation

Customs Brokerage

Receives shipping documents:Bill Of Lading, Packing List Verification of vessel’s arrival ,registry number , and inquire for freight charge Preparation of informal entry declaration – lodgment at VASP (for consignee’s information only )Checks the CPRS of the consignee

If shipment to single consignment, prepares letter of request address to Secretary of Finance, Mabuhay Lane Office for Tax Exemption Certificate.

Procedure

Customs Broker Office

VASP(Value Added

Service Provider) consignee only

Chief- Informal Entry Division

Principal Appraiser

BOC - EPU (Entry

Processing Unit)

COO III

Liquidation & Billing Unit

Assessment Chief

District Collector

ARRASTRE / WHARFAGE CFS warehouse

Pay duties and taxes to land bank

Delivery

FORMAL ENTRY PROCEDURE

Formal entry declaration ( consumption )

Formal Entry•Articles of a commercial nature intended for sale, barter, or hire, the dutiable value of which is more than P2,000.00•Articles for, which the Collector may, upon the recommendation of the Tariff Commission for the protection of a local industry, or the revenue, require formal entry regardless of value and whatever purpose and nature of the importation.

2 types of formal entry :ConsumptionWarehouse

Import Entry and Internal Revenue Declaration(IEIRD) Commercial Invoice Packing List Bill of Lading Licenses/Permits/Clearance

Temporary Assessment Notice

Documents Required

Office Documentation

Customs Brokerage

Importer sends original documents toCustom Broker

Payment of D/T

Customs Broker

Bank - AAB

Prepare Entry Declaration:•Lodgment of IEIRD Entry (SAD),at CEDEC, EKONEK or I-Commerce (VASP) •Print Temporary Assessment Notice

Verification of Vessel’s Time Arrival

and Registry numberInquire for freight charge Computes D/T

Speedier Clearance

Streamlined Procedures

Unprecedented RevenueCollection

C h a n g e I m a g e

E2M SYSTEM

VASPValue Added Service ProvidersPrivately-owned and reputable IT Company accredited by the Bureau of CustomsExtends the services being offered by the Bureau by being the first line of contact of BOC clients for most business transactions

• CARGO DATA EXCHANGE CENTER, INC. (CDEC)www.cdec.com.phTel. 851-8978 and 8539434

• E-KONEK PILIPINAS, INCwww.ekonek.comTel. 879-8310 and 879-8485

• INTERCOMMERCE NETWORK SERVICES, INC. (INS)www.intercommerce.com.phTel. 843-2792 and 845-0509

Eligible VASP

Procedure on BOC

VASP EPD

Release of cargo

FED

Entry Processing Division

Formal Entry Division Collection

division

ARRASTRE/ Wharfage FCL Warehouse

GREEN LANE

YELLOW LANE

RED LANE

ARRASTRE/ Wharfage LCL Warehouse

CY CFS

WAREHOUSING

WA R E H O U S E

A warehouse is a commercial building  for storage of goods. Warehouses are used by manufacturers, importers, exporters, wholesalers, transport businesses, customs, etc.

Types of Warehouses

Public Customs Bonded WarehousePrivate Customs Bonded Warehouse

Example of public warehouse

Customs Bonded Manufacturing Warehouse

Office of Customs Broker

Verify vessel’s arrival and vessel’s registry number ; receives bill of lading, commercial invoice, packing list , import permit Computation of duties and taxes Lodgment of Single Administrative Document

Broker CPRS -Client

profile registration

system VASP- Value Added Services Provider

Warehouse Assessment Division -

EPU

Procedure

Warehouse Assessment Division

EPU

GREEN LANE YELLOW LANE RED LANE

WAD –Examination &Appraisal

BONDS DIVISION

Pier and Inspection Division

ARRASTRE / WHARFAGE

Transfer of Goods

Operating DivisionMBWD/PBWD/GMBWD

Warehousing Assessment Division Entry Processing Unit

Receives, records, segregate documents for processing and forwards verified hard copies to Forwards to WAD sections

Warehouse Assessment Division- EPU

Appraiser

Re- routes it to Green to enable Payment process

“Prints Statement of settlement of duties and taxes and Final Assessment Notice”

Examiner

Conducts document appraisal, amendment of warehousing entry Perform examination based on selectivity color.

Bonds division

Processes entry, charge slip and charge bond.

Prepares bond application and collection of additional charges .

Receives original copy of warehousing entry for safekeeping and future retrieval

System of monitoring, recording and filing of reports .

Recording system of all transactions of the Operating Division

Warehousing Documentation And Records Division

PERMIT

SHIPSIDE

It is a written authority to discharged cargoes to shipside unto lighter/barge as per order of the Collector of Customs. The permit shall be forwarded directly to the Customs Inspector onboard the carrying vessel.

“cruise ship” Passengers Boarded from Lighters

1. Explosive or dangerous cargoes, flammable cargoes or combustible liquids in any quantity including gasoline.

2. Cargoes which are considered fire hazards like raw cotton and paper cutting.

Kinds of imported articles to be given preference in allowing to be discharged under SHIPSIDE:

3. Obnoxious cargoes, corrosive liquids, acids and dangerous poison.4. Shipment for the Republic of the Philippines and its instrumentalities, like gun powder, etc...

5. Heavy Lift Cargoes, when the ARRASTRE contractor has no adequate equipment to handle them or other cargoes which by their nature cannot be handled in the pier .

6. Bulk Cargoes,…i.e. a. Crude Oil, Petroleum productsb. Fertilizer (urea, ammonium sulfate)

c. Soda Ashd. Iron and Steel in bullets, beams, ingots and/or similar productse. Wheat and Flourf. Pulp, paper, paperboard and newsprint in rollsg. Soy, Cacao and cocoa beans h. Staple Wires in Bales

EXPORT

The theory of international trade and commercial policy is one of the oldest branches of economic thought. Exporting is a major component of international trade, and the macroeconomic risks and benefits of exporting are regularly discussed and disputed by economists and others.

Two views concerning international trade present different perspectives.

Background

EXPORT GROWTH STATISTICS

Dollar REMITTANCE

Remittances in Philippines increased to 1,980,320.70 USD Thousand in May of 2014 from 1,913,939.20 USD Thousand in April of 2014. Remittances in Philippines averaged 783,733.78 USD Thousand from 1989 until 2014, reaching an all time high of 2,154,956.20 USD Thousand in December of 2013 and a record low of 64,208 USD Thousand in February of 1989. Remittances in Philippines is reported by the Bangko Sentral ng Pilipinas.

Types of articles and various export terms

Traditional Types of Articles Non-Traditional Types of Articles

TRADITIONAL

TYPE OF ARTICLES

1

The Philippine economy has always depended on its exports for part of its foreign exchange needs. Traditionally, the country has exported mainly natural resource-based goods, usually in their raw, unprocessed forms. It was only during the last two decades that the country has seriously tried to increase the volume of finished or semi-finished export products relative to that of raw materials.

MINERALS RESOURCES

The Philippines is one of the highly mineralized countries

in the world with 9 million hectares considered

to have high mineral potential. According

to the Mines and Geosciences Bureau (MGB),

the country is ranked top five in the world

for overall mineral reserves, second in gold

and third in copper resources.

Gold  

Coconut oil

RATTAN FURNITURES

ARTIFICIAL TREES

Also another source of Philippine export products demand for our country's rich marine product are always rising.  

   

DRIED FISH AND OTHER FISH PRODUCTS

Drying food is the world's oldest known preservation method, and dried fish has a storage life of several years. The method is cheap and effective in suitable climate.

Garments

Finished products manufactured from imported raw materials.

The Philippine garment industry is one of the country’s success stories. Starting as a

cottage-type industry in early 1950s, it has expanded and strongly positioned

itself as the country’s leading non-traditional export.

 

N O N - T R A D I T I ON A L T Y P E

O F A RT I C L E S

2

SEMI-CONDUCTORS/ ELECTRONICS

The National Economic and Development Authority (NEDA) is expecting a further improvement in the exports of semiconductor despite its 23.2 percent decline in January this year.

Export Products of Philippines in 2010

Exporting

selling goods and services produced in the home country

to other markets.

Procedures on exportation

OFFICE EXPORTER/ BROKER’s PREPARATION OF EXPORT DOCUMENTS

Lodgement of Export Declaration

Certificate of Identification(CI) Certificate of

Inspection and Loading (CIL) and BOATNOTE

(BN) >> issued & processed by CBW

Export Declaration

Secure an export commodity clearance/export permit from the proper government commodity office, if your product is included in the list of regulated products for exportation or if the buyer requires.

Export Declaration (ED)Commercial Invoice Packing List

Documents required :Certificate of Identification

Certificate of Inspection and Loading

Certificate of Origin Transfer note

Exporter : will provide Final booking number Commercial invoicePacking list Bill of Lading

IMPORT SECURITY

FILING (ISF) on US only

Broker

Receives : Bill of ladingCommercial Invoice Packing List

BUYERPURCHASE ORDER/ LETTER OF CREDIT (

LC) Prepares : Export Declaration (ED)

AEDS - Automated Export Documentation System

provides for automated capturing of exports transaction data that are reflected in the Export Declaration filed through the VASP.

Lodgement of Export Declaration Document through

VASP (E-KONEK, CDEC, Inter Commerce)

BUREAU OF CUSTOMS (BOC) for SEAFREIGHT

PHILEXPORT OSEDC/ NAIA

for AIRFREIGHT

Exporter: Stuffing/loading & delivery

To port of MICT/ POM

To forwarder’ s warehouse for

airfreight & LCL shipment

Buyer/bankPrepare final export documents as

required to be send to the buyer or bank negotiation for payment of the shipment.

Retrieve Orig. CI/CIL/Boat Note at BOC-CCCD for

Containerized and atForwarder for LCL/ AIR Shipments.

CBW/BOCLiquidation Bonds Cancellation & closing of Import Entries