RULES AND REGULATIONS FURTHER IMPLEMENTING CUSTOMS ADMINISTRATIVE ORDER NO. 5-89, DATED 19 MAY 1989, COVERING NON-COMMERCIAL INBOUND CONSOLIDATION SHIPMENTS FROM FILIPINOS ABROAD

Pursuant to, and in order to effectively implement, Customs
Administrative Order No. 5-89, dated 19 May 1989, the following rules
and regulations are hereby prescribed to govern non-commercial shipments
from Filipinos abroad, to wit:

SECTION 1.       Objectives

1.1       To enhance Philippine tradition and culture for the
promotion and preservation of strong family ties through love and caring
expressed in gift-giving by family members and relatives
residing/living abroad.

1.2       To protect the legitimate interests of bona fide
consignors/senders and their consignees, in particular, and the
transacting public, in general.

1.3       To prevent “fly-by-night” operators from victimizing innocent consignors/senders and their consignees.

1.4       To protect the interests of the government.

1.5       To prevent and suppress smuggling and other frauds upon Customs.

SECTION 2.       Administrative Provisions

2.1       Definitions of Terms. — The following terms are hereby defined, to wit:

2.1.1        Consolidation Shipment — Two (2) or more shipments
from two (2) or more individual consignors/senders abroad, assembled and
consolidated at one point of origin/exportation and shipped together
under a single master ocean bill of lading or master airway bill by a
freight forwarder, consolidator to its breakbulk/consolidation agent in
the Philippines.

2.1.2        Freight Forwarder/Consolidator — A duly licensed and
registered foreign forwarding entity that procures the transport of
goods and issues in its name house bills of lading or house airway bill
to the individual consignors/senders and ships the consolidated shipment
to its breakbulk/consolidation agent in the Philippines as consignee,
under one master airway bill or master bill of lading issued under its
name.

2.1.3        Breakbulk/Consolidation Agent — The Philippine
agent/representative of a freight forwarder/consolidator named in a
master bill of lading or airway bill as consignee of a consolidated
shipment.

2.1.4        Master Ocean Bill of Lading/Airway Bill — An ocean
bill of lading or airway bill issued by a common ocean/air carrier to a
freight forwarder/consolidator covering a consolidated shipment.

2.1.5        House Bill of Lading/Airway Bill — A bill of lading
or airway bill covering a single, individual shipment/consignment issued
by the freight forwarder/consolidator to the consignor/sender
containing the names and addresses respectively, of both the
consignor/sender and the consignee/receiver and the detailed, specific
description/s of the goods shipped.

2.1.6        Consolidated Cargo Manifest — A true and correct
manifest of all the individual shipments/consignments in a consolidated
shipment destined to be unladed in a port of entry in the Philippines,
the same being attached as a Rider to the inward foreign manifest of the
carrying vessel.

2.1.7        Proper Philippine Government Official — A Philippine
consular officer, trade/commercial attaché, labor attaché, or such duly
designated official, whether or not holding office in a Philippine
embassy/consulate, and with whose Head Office in Manila the Bureau of
Customs has executed a Memorandum of Agreement.

2.2       Accreditation/Registration. — No breakbulk/consolidation
agent shall be allowed to transact business with the Bureau of Customs
unless duly accredited and unless both the freight
forwarder/consolidator and consignor/sender is duly registered as
follows:

2.2.1        Accreditation of the Breakbulk/Consolidation Agent. —
The agent shall file a written application executed under oath before a
Notary Public or a Customs official authorized to administer oath, per
format shown in Annex “A” hereof, with the Director, Import Assessment
Service, Office of the Commissioner of Customs, thereto attaching the
following documents:

2.2.1.1 True copies (with presentation of the originals) of —

( )         Articles of Incorporation/Partnership and By-Laws registered with the SEC;

( )         Certificate of Registration issued by the Bureau of Domestic Trade (if applicant is a single proprietorship);

( )         License/Permit issued by the MARINA (Maritime Industry Authority) and/or the Civil Aeronautics Board.

( )         License as Customs broker issued by the Bureau of
Customs to the owner/proprietor or, in case of a
corporation/partnership, to the president, general manager or any one of
the directors/officers or partners.

2.2.1.2 Financial statement and income tax return covering the
last preceding year (if applicant has been in operation for at least one
year).

2.2.1.3 The duly executed contract entered into by and between the
freight forwarder/consolidator and the applicant and which shall
contain the following covenants/undertakings and provisions:

—        That no consolidated shipment shall contain any banned, prohibited or regulated article;

—        That should any consolidation shipment include or
contain any individual shipment/consignment which contains a banned,
prohibited or regulated article or otherwise not allowed under this
Order, both the freight forwarder/consolidator and the
breakbulk/consolidation agent shall be jointly and solidarily liable,
answerable and responsible to all the consignors/senders and their
consignees who may be prejudiced by the inclusion of such banned,
prohibited or otherwise not allowed articles, without prejudice to civil
damages, criminal and/or administrative prosecution, as may be proper,
as well as to the institution of seizure proceedings against the
shipment/consignment concerned;

—        That no individual shipment/ consignment shall exceed
the limits as to value, quantity, kind and frequency fixed by the Bureau
of Customs;

—        That the freight forwarder/consolidator shall advise
the consignor /sender, and ensure, that no prohibited, banned or
regulated article is included in the shipment and the limits fixed be
duly complied with;

—        That the freight forwarder/consolidator shall register with the proper Philippine government official;

—        The contract shall contain a provision clearly
indicating whether the individual consignees shall pay for the duties
and taxes due, transport/delivery expenses, storage/demurrage charges
and/or any specified expenses.

2.2.1.4 Fidelity/Performance Bond — The applicant shall post a
continuing fidelity/performance or surety bond in the amount of
P100,000.00 to guarantee faithful compliance with this Order and all
pertinent Customs and related rules and regulations as well as to answer
for any damage which the government, consignors/senders and their
consignees may suffer from the misconduct or negligence of subject
breakbulk/consolidation agent and its principal freight
forwarder/consolidator or their respective officers or employees, and
for any financial obligation liability assumed by the
breakbulk/consolidation agent and not settled with the Bureau of
Customs.

2.2.2        Registration of the Freight Forwarder/Consolidator. —
The freight forwarder/consolidator shall register with the proper
Philippine government official by submitting copies of the following:

2.2.2.1 License/permit and/or certificate of registration or
authority issued by the appropriate agency of the government of the
country in which the freight forwarder/consolidator operates or is
engaged in the business;

2.2.2.2             A certified true copy of the contract entered into with the Philippine breakbulk/consolidation agent.

2.2.3        Registration of the Consignor/Sender — The
consignor/sender shall register with the proper Philippine government
official by executing an Affidavit per format shown in Annex “B” hereof
before an officer at the Philippine embassy/consulate nearest to such
consignor/sender’s residence, place of business or employment. The
terms, conditions and requirements indicated in the format are hereby
made an integral part of this Order.

2.2.4        Life of the Accreditation/Registration — Unless
sooner revoked or withdrawn, the accreditation or registration shall be —

2.2.4.1 For a term of one (1) year, renewable yearly upon
application in writing not less than fifteen (15) days prior to the
expiration of the one (1) year period reckoned from the date of approval
of the registration/accreditation, in the case of both the
breakbulk/consolidation agent and the freight forwarder/consolidator,
respectively; and

2.2.4.2 Permanent, in the case of the consignor/sender unless
revoked or withdrawn by the Philippine government official at the
instance of the Bureau of Customs.

SECTION 3.       Operational Provisions

3.1       Documentary Requirements. — The following supporting
documents shall be required for the filing/processing and import
entries:

3.1.1        The inward foreign manifest with the corresponding Rider or consolidated cargo manifest.

3.1.2        The Master ocean bill of lading or master airway bill
with the corresponding individual house bills of lading or house airway
bills.

3.1.3        The packing lists per individual consignment/
shipments, verified as true, correct and accurate and signed by both the
consignor/sender and the freight forwarder/consolidator with their
complete addresses and registration numbers, respectively,

The packing list shall be attached to the box/package containing the goods.

3.2       Filing of the Import Entry — There shall be filed as
many informal entries as there are individual consignments in a
consolidated shipment; Provided that, a formal entry shall be filed for
commercial consignment subject to existing Customs and related rules and
regulations.

The following procedures shall be observed:

3.2.1        All entries covering individual consignments in a
consolidated shipment shall be filed and processed altogether at the
same time.

3.2.2        The separate filing and/or processing of any of the entries shall be allowed where —

3.2.2.1 The consolidated shipment is covered by or subject of a duly issued derogatory alert/information;

3.2.2.2 The consolidated shipment was entered in violation of Customs and/or related laws, rules and regulations; and/or

3.2.2.3 Upon examination; it is found that any of the individual
shipments was entered in violation of Customs and/or related laws, rules
and regulations and such violation warrants the issuance of a Warrant
of Seizure & Detention (WSD).

In any of the above cases, the individual consignments found to be
in order and without discrepancy shall be processed separately ahead in
order to avoid any undue inconvenience, delay and/or prejudice to the
consignees thereof who shall be allowed to have the entries processed
and the shipments released on their own or thru the assistance of any
Customs broker of their choice in which case the brokerage fee shall be
chargeable to the breakbulk/consolidation agent concerned. Where any of
said consignees is unable, for whatever reason, to employ the services
of a Customs broker, the Chief of the Division concerned shall see to it
that such consignee is given all the necessary assistance.

3.3       Examination. — The examination of a consolidated shipment shall be conducted as follows:

3.3.1        Regular Examination — Where the packing list is
attached to the box/package containing the individual
consignment/shipment, the assigned Customs examiner may conduct the
examination at random and, thereby, make a speedy determination whether
the contents correspond with the packing list.

3.3.2        100% Examination. — A thorough 100% examination shall be conducted where —

3.3.2.1 The packing list is not attached to the box/package; or

3.3.2.2 The consolidated shipment is covered by a duly issued
derogatory alert/information; or when in the course of conducting the
regular examination, a violation/discrepancy is found which warrants the
issuance of a WSD; Provided that, in either case, the provisions of CMO
No. 65-89, dated 12 July 1989, shall be duly and strictly complied
with.

3.4       Appraisal. — The appraisal of consolidated shipments
shall be based on the nature/character of the article under appraisement
on a per item basis, subject to existing rules and regulations on the
treatment of used, off-quality, second hand, etc. items.

3.5       Limitations. — Maximum limits per individual consignment/shipment shall be, and are hereby fixed, as follows:

3.5.1        As to value     US$500.00

3.5.2        As to quantity/kind

3.5.2.1 Foodstuff such as canned goods, grocery items, etc.      1 dozen of a kind

3.5.2.2 Wearing apparel and clothing material not exceeding 3 years per cut, whether used or new 1 dozen of a kind

3.5.2.3 Other household, personal effects, whether used or new     1 dozen of a kind

3.5.3        Number of box/package       1

3.5.4        As to frequently: One (1) individual consignment per registered consignor/sender during a 6-months period.

Provided that, home appliances whether used or new, shall be
disallowed; and Provided further that, any consignment/shipment entered
in violation of the limits herein fixed shall automatically be subjected
to seizure proceedings, without prejudice to the
cancellation/revocation of the certificate of registration of either or
both the freight forwarder/consolidator and consignor/under as well as
the cancellation/revocation of the accreditation of the
breakbulk/consolidation agent.

SECTION 4.       Miscellaneous Provisions

In order to implement an efficient and centralized control and
recording system, a Consolidation Shipment Committee is hereby
constituted as follows:

Chairman	The Director, Import Assessment Service
Members	A representative each of the CIIS and ESS The Chiefs, Informal Entry Divisions, POM, MICP and NAIA

The Committee may issue its internal guidelines pursuant to, and
consistent with, this Order and its objectives, subject to the approval
of the Commissioner of Customs.

SECTION 5.       Effectivity

Upon approval of this Order, applications for accreditation of
breakbulk/consolidation agents may immediately filed with, and processed
by, the Committee; and the registration of freight
forwarders/consolidators and consignors/senders processed by the proper
Philippine government official.

The implementation/enforcement of all the other provisions shall
commence and be effective thirty (30) days from the publication of this
Order in two (2) newspaper of general circulation whereupon, all
consolidation shipments shall be governed accordingly.

Adopted: 16 Apr. 1990

(SGD.) SALVADOR M. MISON
Commissioner