By MARK ANTHONY TAMAYO on March 4, 2021.

The process of clearing imported goods from the Bureau of Customs (BoC) is essentially timebound. Every importer must file or lodge a goods declaration, pay the corresponding duties and taxes, and claim or release the goods within the periods prescribed under customs laws, rules and regulations.

There are circumstances, however, when the importer, owner or consignee of these goods fails, intentionally or not, to comply with these responsibilities, thus resulting in the abandonment of these goods.

To effectively implement abandonment provisions under Section 1129 and 1130 of Republic Act 10863, or the “Customs Modernization and Tariff Act,” the BoC issued Customs Administrative Order (CAO) 17-2019 and 13-2020, signed on Oct. 19, 2019 and Oct. 7, 2020, respectively, to address port congestion and improve revenue collection, among others.

The abandonment of imported goods can either be express or implied.

Express abandonment

Under CAO 17-2019, express abandonment occurs when an importer expresses in writing his intention to abandon the imported goods in favor of the government by submitting an affidavit of abandonment. This can be done while these goods are under the BoC’s control or until the duties and taxes due on the goods entered under the customs bonded warehousing regime are paid.

Once the said affidavit is filed with the district collector, the imported goods shall ipso facto be deemed the government’s property. All interests and rights over these expressly abandoned goods are deemed renounced by the importer in favor of the government. Thus, these goods may auctioned off or disposed of at the port where they are located.

Under Customs Memorandum Order (CMO) 26-2020, goods unsuitable for official use or donation that remain unsold after at least two failed biddings may be sold through a negotiated sale. This, however, shall be subject to the approval of the Finance secretary.

Implied abandonment

Under CAO 17-2019 and 13-2020, implied abandonment occurs when an importer, after due notice, fails to comply with the statutory periods provided by the rules to:

– Lodge and file a goods declaration within 15 days from notice of date of discharge of the last package or within the approved extension to file;

– Pay the assessed duties and taxes within 15 days from the final assessment;

– Submit the required permits or clearances (for regulated goods) within 15 days from the final assessment;

– Submit the required documents or information within 45 days from the date of lodgment in case of provisional goods declarations or within the approved extension;

– Claim the goods within 30 days from the payment of assessed duties and taxes;

– Withdraw imported raw materials or goods within one year — or three months for perishable goods — from the date of arrival at the customs bonded warehouse; or

– Appropriately mark or label the goods, when necessary, within 30 days after receiving the notice from the district collector.

For accredited importers, the required notices shall be sent by the BoC to their registered email addresses or through personal services; and for non-accredited ones, through registered mail or personal service.

As a matter of course, a Decree of Abandonment shall be issued by the district collector concerned. Any request for reconsideration or appeal to the commissioner must be filed within 15 days from the notice pursuant to CMO 4-2021.

Lifting, claiming or recovery of proceeds from the sale of impliedly abandoned goods

If the BoC has not disposed of the goods, the importer may file with the district collector a written request to lift or set aside the Decree of Abandonment.

Once the request is approved, the importer would be allowed to claim the impliedly abandoned goods after lodging a goods declaration within 30 days after the prescribed period to file this declaration has lapsed and fully paying the corresponding duties, taxes and other charges.

But if the BoC already sold the goods, the importer may instead claim the proceeds from the sale. In this case, the importer must file a request for it within 30 calendar days from the winning bidder’s payment of the auction price.

Upon approval, the proceeds shall be turned over to persons entitled to receive them. The proceeds shall be net of duties and taxes, and all other charges and expenses. These are government storage charges; expenses for the appraisal, advertisement and sale of the auctioned goods; arrastre and private storage charges, and demurrage charges; and freight, lighterage or general average on the voyage of importation. The balance will then be deposited in a “forfeiture fund” managed by the BoC, which shall be used to support its modernization program and other operational efficiency and trade facilitation initiatives, among others.

Any decision allowing the proceeds’ release shall be regarded as one adverse to the government and therefore, shall be subject to review by the BoC chief or Finance secretary, as the case may be.

Penalties

Under CAO 13-2020, the lifting, claiming or recovery of proceeds from the sale of impliedly abandoned goods requires paying penalties, surcharges, interests and other charges upon the request’s approval. These penalties depend on the reason the goods were considered impliedly abandoned, and on whether a decree of abandonment was already issued or not.

The penalties range from P1,000 to P30,000. On certain instances, the penalty includes an additional 20 percent of the excess of the de minimis value. The docket request charge ranges from P300 to P10,000, while a P30 documentary stamp tax shall be imposed.

Importing goods into the Philippines has concomitant responsibilities and obligations on the part of the importer. Ignorance of these could lead to it paying unnecessary and additional import costs.

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Rules on abandoning imported goods