PROCEDURES FOR TENTATIVE RELEASE OF SHIPMENTS UNDER BOND PENDING RESOLUTION OF VALUATION ISSUES

PURSUANT TO SECTION 608 IN RELATION TO SECTION 201 OF THE TARIFF AND
CUSTOMS CODE OF THE PHILIPPINES, AS AMENDED AND CUSTOMS ADMINISTRATIVE
ORDER NO. 2-99, THE FOLLOWING RULES AND REGULATIONS ARE HEREBY
PROMULGATED:

I.          OBJECTIVE

To facilitate the processing and release of shipments where there is
a delay in the final determination of the value of imported goods.

II.         SCOPE

This Order shall cover all Entries in all ports, except with respect
to shipments subject to Comprehensive Import Supervision Service
(CISS), which during the effectivity of the CISS shall continue to be
governed by the existing rules and regulations applicable in the matter,
provided that any reference to value shall be construed to mean the
dutiable value as defined in Section 201 of the Tariff and Customs Code
of the Philippines, as amended by Republic Act No. 8181 and implemented
by Customs Administrative Order No. 2-99.

III.        ADMINISTRATIVE PROVISIONS

1.         Tentative Release — Is the release from customs custody,
under bond, of an imported shipment pending the resolution of a
valuation issue.

2.         When Tentative Release may be Allowed — Tentative release
of shipment covered by this Order may be availed of when said shipment
is selected for valuation check and the Valuation Review Committee
(VRC), to which body the concerned entry is automatically forwarded by
the assessment unit concerned, has determined that a valuation issue
exists and the resolution of which will result in a delay in the
processing of the subject Entry.

For purposes of this Order, delay shall mean that the VRC cannot
resolve the issue within sixteen (16) working hours from receipt of the
questioned Entry for lack of sufficient documents/information required
of the importer.

3.         Approving Authority — The Collector of Customs, upon the
evaluation and recommendation of the VRC, shall approve requests for the
tentative release of shipments under bond.

4.         The tentative release of shipments shall not be allowed, or if already granted, the same is deemed withdrawn when:

4.1    The shipment is the subject of an alert/hold order involving an enforcement issue.

4.2    The shipment has incurred a violation that would merit the issuance of a Warrant of Seizure and Detention (WSD).

4.3    The importer fails to put up the required security, in
which case, the VRC shall resolve the issue without the benefit of
tentative release.

4.4    In any other instance where the VRC can actually resolve
the valuation question within sixteen (16) working hours from receipt of
the valuation selected Entry.

5.         Form of the Security — To secure the additional revenue
in the event of an adverse decision resulting in higher customs
assessment, the importer shall be required to post a guarantee which may
take the form of Cash or a Manager’s/Cashier’s check.

6.         Amount of Security — The amount of the security shall be
equivalent to the difference in the duties, taxes and other charges
assessed by Customs using any of the acceptable method of valuation as
against the duties, taxes and other charges computed based on the
declaration plus 25% thereof.

7.         Handling of Security — The treatment of Cash/Check
Guarantee for tentatively released shipment shall be handled in
accordance with Customs Memorandum Order (CMO) No. 4-99.

8.         The Chief, Collection Division shall be personally
responsible for the safekeeping and proper disposition of all forms of
security deposited with the Bureau.

IV.       PROCEDURE ON THE TENTATIVE RELEASE OF SHIPMENTS UNDER BOND

1.         When the importer opts to avail of the Tentative Release
of shipments in appropriate cases, the importer shall file with the
District Collector of Customs through the VRC a formal request for
tentative release of his shipment using the application format attached
hereto as Annex A.

2.         The VRC shall evaluate the request and forward
recommendation, including the computed assessment, to the District
Collector for approval.

3.         If disallowed, the VRC shall resolve the valuation issue
without benefit of tentative release. If disallowance is by reason of
enforcement issue/WSD, the shipment shall be processed in accordance
with existing rules and regulations applicable in the premises.

4.         If allowed, the VRC shall transmit the Entry to the
Collection Division which shall determine sufficiency of initial payment
of duties and taxes, and the securing of the required guaranty.

5.         Upon posting of the required security, the Collection
Division shall immediately transmit the Entry to the VRC for appropriate
disposition including the flagging of the subject Entry in ACOS as
tentatively released importation.

6.         The decision of the District Collector of Customs on
valuation issue under this Order issue shall be forwarded to the
Collection Division for implementation.

6.1    If the decision results in the acceptance of the declared
value, the guaranty shall be returned to the importer in accordance with
existing regulations.

6.2    If the decision results in payment of additional duties and
taxes which is less than the amount of the guaranty, the guaranty shall
be applied and the excess shall be returned to the importer.

6.3    If the decision results in payment of additional duties and
taxes which is equal to the guaranty, then the guaranty shall be
applied in full.

6.4    If the decision results in payment of duties and taxes
which is higher than the amount of the guaranty, the guaranty shall be
applied and the importer shall be made to pay the deficiency.

V.        REPEALING CLAUSE

All Orders, Memorandums, Circulars or parts thereof which are
inconsistent with this Memorandum are hereby deemed repealed and/or
modified accordingly.

VI.       EFFECTIVITY

This order shall take effect on January 1, 2000.

Adopted: 28 Dec. 1999

(SGD.) NELSON A. TAN
Commissioner