customs clearance procedures in the Philippines . for : a bit of letter of credit import export overview on ship side

1. CUSTOMS
Clearance
PROCEDURES
By : Danna Nicole
MaLraoñuavie Dieron

2. Points of
Discussion
Import Letter of Credit
Informal Entry Procedures
Formal Entry Procedures
a. Consumption Entry
b. Warehousing entry
Simplified Export Procedures

3. 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.

4. FLOW CHART on IMPORT LETTER OF CREDIT ( L/C ) TRANSACTION
Seller/Exporter
Beneficiary
Buyer /
Importer
Inquires the product & price lists …
Application
copy of L/C
BPI
Global City ,
Taguig
Applies L/C to
Opening Bank
.
Opening /
Issuing Bank
CITIBANK – New York
Advising / Negotiating Bank

5. INFORMAL ENTRY PROCEDURE

6. 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.

7. 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 Residents
B. Consolidated shipments contained in balikbayan boxes thru an
Int’l Freight Forwarding service.

8. 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”)

9. Documents
Required
Informal Import Declaration and Entry (B.C. Form
No. 177.
Clearance of Single Consignee’s Shipment pursuant to
CMO 10-91.
Philippine Passport of an Individual
Certificate of Exemption, (letter of request to DOF ).
Packing List
Bill of Lading
Permit to Deliver Imported Goods (B.C. Form No.
194.
Clearance of Consolidated Shipment under CMO 54-
89 and CMO 79.90.
Bill Of Lading
Packing List
.Permit to Deliver Imported Goods (B.C. Form No.
194.
Single
consignment
Consolidated

10. Office
Documentation
Custom
s
Brokera
ge

11. 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.

12. Procedure

13. 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
Pay duties and
taxes to land
bank
ARRASTRE /
WHARFAGE
CFS warehouse
Delivery

14. FORMAL ENTRY PROCEDURE

15. Formal entry declaration ( consumption )

16. 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 :
Consumption
Warehouse

17. Documents Required
Import Entry and Internal
Revenue Declaration(IEIRD)
 Commercial Invoice
 Packing List
 Bill of Lading
 Licenses/Permits/Clearance
Temporary Assessment Notice

18. Office
Documentation
Custom
s
Brokera
ge

19. Importer sends
original
documents to
Custom Broker
Customs Broker
Verification of Vessel’s Time Arrival
and Registry number
Inquire for freight charge
Computes D/T
Prepare Entry Declaration:
•Lodgment of IEIRD Entry (SAD),at
CEDEC, EKONEK or I-Commerce
(VASP)
•Print Temporary Assessment Notice
Payment of D/T
Bank - AAB

20. C h a n g e I m a g e
Speedier Clearance
St reaml ined
Procedures
Unprecedented Revenue
Collection
E2M SYSTEM

21. VASP
Value Added Service Providers
Privately-owned and reputable IT Company
accredited by the Bureau of Customs
Extends the services being offered by the Bureau by
being the first line of contact of BOC clients for most
business transactions
Eligible VASP
• CARGO DATA EXCHANGE CENTER, INC. (CDEC)
www.cdec.com.ph
Tel. 851-8978 and 8539434
• E-KONEK PILIPINAS, INC
www.ekonek.com
Tel. 879-8310 and 879-8485
• INTERCOMMERCE NETWORK SERVICES, INC. (INS)
www.intercommerce.com.ph
Tel. 843-2792 and 845-0509

22. Procedure
on BOC

23. VASP EPD
GREEN LANE YELLOW LANE RED LANE
Release of cargo
Entry Processing Division
FED
Formal Entry Division
Collection
division
ARRASTRE/
Wharfage FCL
Warehouse
ARRASTRE/
Wharfage LCL
Warehouse
CY CFS

24. WAREHOUSING

25. 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.

26. Types of Warehouses
Public Customs Bonded Warehouse
Private Customs Bonded Warehouse

27. Example of public warehouse

28. Customs Bonded Manufacturing Warehouse

29. 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

30. Broker
Procedure
CPRS -Client profile
registration system
VASP-Value Added
Services Provider
Warehouse
Assessment
Division -EPU

31. Warehouse Assessment Division
EPU
GREEN LANE YELLOW LANE RED LANE
WAD –Examination &
Appraisal
BONDS DIVISION
Pier and Inspection
Division
ARRASTRE /
WHARFAGE
Operating Division
MBWD/PBWD/GMBWD
Transfer of
Goods

32. Warehousing Assessment Division Entry Processing Unit
Receives, records, segregate
documents for processing and
forwards verified hard copies to
Forwards to WAD sections

33. 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.

34. Bonds division
Processes entry, charge
slip and charge bond.
Prepares
bond
application
and collection
of additional
charges .
Warehousing Documentation
And Records Division
Receives original copy of
warehousing entry for
safekeeping and future
retrieval
Recording system of
all transactions of the
Operating Division
System of monitoring,
recording and filing of reports
.

35. SHIPSIDE
PERMIT

36. 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

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

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

39. 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 .

40. 6. Bulk Cargoes,…i.e.
a. Crude Oil, Petroleum products
b. Fertilizer (urea, ammonium sulfate)
c. Soda Ash
d. Iron and Steel in bullets, beams, ingots and/or similar
products
e. Wheat and Flour
f. Pulp, paper, paperboard and newsprint in rolls
g. Soy, Cacao and cocoa beans
h. Staple Wires in Bales

42. Background
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.

43. EXPORT GROWTH
STATISTICS

44. Dol lar 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.

45. Types of articles
and various export terms
Traditional Types of Articles
Non-Traditional Types of Articles

46. 1
TRADITIO
NAL TYPE
OF
ARTICLES
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.

47. 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.

48. Gold
Coconut oil

49. RATTAN
FURNITURES
ARTIFICIAL
TREES

50. 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.
Also another source of
Philippine export products
demand for our country's
rich marine product are
always rising.

51. 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.
2
N O N -
T R A D I T I O
N A L T Y P E
O F
A R T I C L E S

52. 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.

53. Export Products of Philippines in 2010

55. Procedures on
exportation

56. 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

57. Documents required :
Export Declaration (ED)
Commercial Invoice
Packing List
Export Declaration
Certificate of Identification
Certificate of Inspection and Loading
Certificate of Origin
Transfer note
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.

58. Exporter : will provide
Final booking number
Commercial invoice
Packing list
Bill of Lading
IMPORT SECURITY FILING
(ISF) on US only
Broker Receives : Bill of lading
Commercial Invoice
Packing List
BUYER
PURCHASE ORDER/
LETTER OF CREDIT (
LC) Prepares : Export
Declaration (ED)

59. 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)

60. 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

61. Buyer/bank
Prepare final export documents as required
to be send to the buyer or bank
negotiation for payment of the
shipment.
CBW/BOC
Liquidation Bonds Cancellation & closing of
Import Entries
Retrieve Orig.
CI/CIL/Boat Note at BOC-CCCD for
Containerized and at
Forwarder for LCL/ AIR Shipments.