RULES AND REGULATIONS STRENGTHENING THE FUNCTIONS OF WAREHOUSE COORDINATION DIVISION (WCD) UNDER THE OFFICE OF THE ASSESSMENT OPERATIONS COORDINATION GROUP (AOCG)

a. To ensure that the rules and regulations on customs bonded
warehouse are properly implemented thru effective coordination,
evaluation, supervision and monitoring of relevant policies and
guidelines as provided in Executive Order No. 127 and enhanced in
Customs Administrative Order No. 1-2009 entitled “Revised Rules and
Regulations for the Establishment, Operation, Supervision and Control of
Customs Bonded Warehouses;

b. To have a central office/unit responsible for coordination,
evaluation, supervision and monitoring and warehousing
activities/operations, including the liquidation of bonded raw materials
and subsequent bonds cancellation;

c. To have an organic unit or central office implementing a duly
formulated effective internal control system to monitor and deter
possible violations of rules and regulations on warehousing, such as
setting a comprehensive database related to warehousing
activities/operations;

d. To protect the interest of the government against abuses of
warehousing privilege by developing the Compliance Rate System (CRS),
subject to the review by the Department of Finance and, establishing the
Wastage Valuation Data Base (WVDB), which shall be utilized by the BOC
in assessing the duties and taxes due on allowable residue/wastage/
by-products or other portion of the imported article/s which can no
longer be used for the manufacture of article to be exported.

e. To efficiently recommend to the Commissioner of Customs thru the
Deputy Commissioner, AOCG, appropriate sanctions against CBW Operator
found to be non compliant with existing customs rules and regulations;

f. To have a real time data on warehousing activities/operations for
reportorial purposes to the Commissioner of Customs and as may be
required by other government agencies; and

g. To perform other appropriate functions consistent with the assigned tasks of the AOCG that may be given by the Commissioner.

II. SCOPE

This Order covers all matters relating to the monitoring,
supervision, coordination and evaluation of warehousing activities and
its support operations, to include the liquidation of bonded raw
materials, by strengthening the functions of Warehouse Coordination
Division, Import Assessment Service, AOCG, pursuant to Executive Order
No. 127 and further enhanced under Customs Administrative Order No.
1-2009 dated 12 March 2009.

III. ADMINISTRATIVE PROVISIONS

1. The Warehouse Coordination Division (WCD), is hereby directed to
establish and maintain a comprehensive database of information related
to warehousing activities and its support operations.

To this end, the Warehousing Documents and Records Division (WDRD) of
the Port of Manila or its equivalent unit in all Ports are directed to
furnish the WCD certified true copies of the 201 files of all customs
bonded warehouse operators, including their respective extension
warehouse, if any, sub-contractors, members, and/or client/end-users and
such other relevant information as may be required.

2. In the same manner, in order to effectively monitor, supervise,
coordinate and evaluate the warehousing activities, including the
liquidation of bonded raw materials in all Ports, the Warehouse
Operating Divisions or its equivalent unit in all Ports are directed to
furnish the WCD, certified true copies of reports relating to
warehousing activities/ support operations of customs bonded warehouse
under their respective jurisdiction which shall include, among others, the Approved List of Importable Raw Materials, Latest ITDI Formula of
Manufacture, Description of Finished Product in the Export Declaration,
Summary of Monthly Reports of Filed and Processed Warehousing Entries
and/or Transfer Notes, if any, Percentage of Sale to the Domestic
Market, Quota Allocation for Regulated Commodities (e.g. sugar, resin),
GTIS Accreditation for Garments, Service Agreement with Subcontractor
together with the List of Raw Materials/Semi-Finished Articles to be
Subcontracted, Statement of Full/Partial Liquidation submitted by CBW
Operator, Description of Waste Materials/Rejects/By-Products, Withdrawal
Permit filed covering the wastages/by-products and Duties and Taxes
paid on wastages/rejects/by-products, if any;

3. Further, the WCD, shall be given free access to presently maintained and/or hereinafter to be established Automated Raw Material
Inventory Management System (ARMIMS), Automated Bonds Management System
(ABMS), Raw Material Liquidation System, and/ or counterpart systems. In
the meantime, the Liquidation and Billing Division and Bonds Division
or their counterparts in all Ports shall provide the same access to WCD
to carry out the set forth objectives;

4. The WCD shall submit to the Commissioner of Customs thru the
Deputy Commissioner, AOCG, a Monthly Comprehensive Report relative to
the warehousing activities/operations of customs bonded warehouse
operator, including its sub-contractor/s, member/s and/ or
client/end-user/s, if any, applying for the accreditation of its
member/s and/or client/ end-user/s, if any, or for the renewal of its
license to operate.

5. The said Comprehensive Report shall include among others, WCDs’
assessment and recommendation on the degree of compliance of concerned
CBW including its sub-contractor/s, member/s and/or client/end-user/s,
if any, with relevant laws, customs rules and regulations pertinent to
warehousing;

6. Accordingly, the WCD shall become the official Secretariat of the
Bonded Warehouse Committee which shall be responsible for the
safekeeping of all applications deliberated by the Committee. It shall
serve as the custodian of all relevant data pertaining to the operation
of a customs bonded warehouse and shall be responsible to the
Commissioner of Customs, thru the Chairman, BWC in providing the most
updated data on warehousing activities.

7. The WCD may report directly to the Deputy Commissioner, AOCG, on matters requiring immediate action.

IV. OPERATIONAL PROVISIONS

For effective and efficient monitoring, supervision, coordination and
evaluation of all warehousing activities/operations and to guard
against possible revenue leakages that may arise therefrom, the
following guidelines are hereby established:

1. Within fifteen (15) days from the effectivity of this Order, the
WDRD of the Port of Manila or its equivalent unit in all Ports are
directed to furnish the WCD, certified true copies of presently
maintained 201 files of all CBW operators, including their respective
sub-contractors, member/s and/or client/end-user/s, if any;

2. Within similar period of time, all operating Warehouse
Divisions/Units in all Ports are likewise directed to furnish the WCD,
certified true copies of all records relating to warehousing activities
/operations of all customs bonded warehouse opera tors, including their
respective sub-contractors, member/s and/or client/end-user/s, if any;

3. Upon submission thereof, the WCD is hereby directed to establish
and maintain a comprehensive data base of all licensed customs bonded
warehouse operators, including their respective sub-contractors, members
and/or client/end-users, which shall include among others, the
following:

a. Name and address of the Customs Bonded W arehouse/CBW No.
(including the Extension Warehouse and/or customs accredited
Sub-contractor/s if any);
b. Effectivity of the License to Operate
c. Type (e.g. Manufacturing, Public, Private, Common (Member/s), ICBW (Food), etc.);
d. Brief Description of Principal Products Manufactured, if any (e.g. Garments, Plastic Products etc.);
e. Latest Application (e.g. renewal, accreditation, expansion/extension/change of name/inclusion of raw materials etc.);
f. Approved List of Importable Raw Material/s
g. Latest ITDI Formula of Manufacture, if any
h. Annual Volume of Importation/No. of Entries
i. Annual Volume of Exportation/Finished Product
j. Annual Percentage of Sale to the Domestic Market
k. Incentive (BOI, PEZA, Freeport etc.)
l. Annual Audited Financial Statement
m. Articles of Incorporation or DTI Certificate of Business Registration;
n. Other pertinent documents.

4. Similarly, the concerned Bureau of Customs Unit/Division shall
give the WCD, free access to presently maintained and/or hereinafter to
be established Automated Raw Material Inventory System, Automated Bonds
Management System, Raw Material Liquidation System, and/or counterpart
system;

In case of failure and/or unjustified refusal to submit the
regular and/or periodic reports required, including but not limited to
the documents enumerated in the preceding paragraph, and/or to give WCD,
access to presently maintained and/or hereinafter to be established
Automated Raw Material Inventory System, Automated Bonds Management
System, Raw Material Liquidation System, and/or counterpart system, or
access by the Liquidation and Billing Division and Bonds Division, the
erring BOC official/s and/or employee/s may be administratively held
liable under existing civil service laws, rules and regulations, without
prejudice to possible prosecution under the pertinent provisions of the
Tariff and Customs Code, as amended;

5. In order to fully guide the Bonded Warehouse Committee (BWC) in
denying and/or granting applications for accreditation and/or license to
operate a CBW, including extension facilities, member/client/end-user,
whether provisional or otherwise, and other relevant applications, the
BWC shall transmit said applications to WCD which in turn will submit to
the BWC a comprehensive report within seven (7) days upon receipt
thereof together with the recommendation as to the degree of compliance
of the CBW Operator with relevant laws, customs rules and regulations;

6. The WCD shall enlist the assistance of other offices in the
Bureau, e.g. Warehouse Audit Monitoring Unit (WAMU), Post Entry Audit
Group (PEAG), Investigation Prosecution Division (IPD) and Legal
Service, to audit, investigate and for possible filing of
administrative, civil and criminal case against erring CBW operator/s
which are ascertained to be not complying with relevant laws, customs
rules and regulations.

Based on reports submitted by such offices to WCD, the latter may
recommend the imposition of applicable sanctions against such errant CBW
to the BWC including the prosecution of the CBW operators in judicial
proceedings for violation of customs laws, rules and regulations subject
however, to the final review and approval by the Commissioner of
Customs.

V. PENAL CLAUSE

Failure to comply with the directives of this Order may cause the
suspension, revocation or cancellation of the accreditation of the
concerned CBW operator without prejudice to any criminal/civil liability
that may arise therefrom and shall subject the concerned BOC official/s
and/or employee/s to administrative sanctions under existing civil
service laws, rules and regulations.

VI. REPEALING/SEPARABILITY CLAUSE

All Orders, Rules, Regulations and other Issuances which are
inconsistent with the provisions of this Order are hereby revoked and/or
modified accordingly. In case any provision of this Order is declared
invalid or unconstitutional, the provisions not affected thereby shall
continue to be in full force and effect.

VII. EFFECTIVITY

This order shall take effect immediately.

Adopted: 11 Aug. 2009

(SGD.) NAPOLEON L. MORALES
Commissioner