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Streamlining rules on transshipment of goods

By Gwendolyn Ann Banaria on June 16,2022

IN order to streamline procedures in the processing of goods for transshipment and to delineate the duties and responsibilities of the different offices involved in the clearance of such goods, the Bureau of Customs (BoC) has issued Customs Memorandum Order (CMO) 15-2022 providing the rules and regulations implementing Customs Administrative Order (CAO) 12-2019 on the Transshipment of Goods. CMO 15-2022 supplies administrative and operational provisions to ensure that trade facilitation can be genuinely achieved by eliminating roadblocks that curtail the expeditious processing of goods for transshipment.

CMO 15-2022 specifies the scope and coverage of CAO 12-2019 from “all foreign goods for transshipment” to “all goods clearly indicated in the Transshipment Foreign Cargo Manifest as destined for a foreign destination other than the Port of Discharge.”

“Transshipment” refers to the customs procedure under which goods are transferred under Customs control from the importing means of transport to the exporting means of transport within the area of one Customs office, which is the office of both importation and exportation.

Further, said memorandum order defines the terms “transit of strategic goods” and “transshipment of strategic goods,” which were not provided in CAO 12-2019. “Transit of strategic goods” refers to the shipment of strategic goods within the Philippines and those entering and passing through the territory of the Philippines with an ultimate destination outside the Philippines in such a manner that the strategic goods remain at all times in or on the same carrier. On the other hand, “transshipment of strategic goods” refers to a mode of shipping a good on a carrier that enters the territory of the Philippines, wherein the good is unloaded from the carrier and reloaded in the same or on another carrier that is bound for an ultimate destination outside the Philippines.

CMO 15-2022 reiterates that goods intended for transshipment shall not be subject to the payment of duties and taxes, provided that the transshipment goods declaration particularly indicates such nature of goods, duly supported by commercial or transport documents or evidence as required by the BoC.

All entities engaged in transshipment activities must apply for accreditation with the BoC as transshippers upon implementation of the electronic lodgment of the transshipment goods declaration. This shall include cargo forwarders, consolidators, shipping lines, air express cargo operators (AECOs) and other similar entities engaged in transshipment operations.

CMO 15-2022 enumerates the documents that must be submitted by the carrier’s agent or representative when applying for the transshipment permit. It must be noted that there are transshipments where a transshipment permit is not needed, i.e. Transshipment Operations of Hub Facilities operated by AECOs (Section 6). Such operations shall be dedicated to the sorting and distributing of shipments from points across the world that are then physically transferred to a connecting transportation mode. Transshipment operations at hub facilities may cover transfer, transhold, transload and transsort.

CMO 15-2022 also introduces the electronic tracking of containerized cargo system, which equips in-transit transfer of goods in containers with electronic customs seal. Additionally, this order mandates the chief, piers inspection division/aircraft operations division/equivalent unit to submit a report to the deputy collector for operations of the port of discharge of all goods for transshipment that are still in the ports 30 days after their date of discharge from the carrying vessel or aircraft or five days after their receipt at the hub facilities in case of express shipments.

There are provisions on direct transfer to vessels/aircraft, transshipment of bulk and break-bulk cargoes, in-transit transfers, transshipment of goods via air and even those covered by international conventions and agreements as well. This memorandum order restates that supervision fees shall be collected for all transshipment goods as provided under CAO 12-2019.

Finally, CMO 15-2022 provides a schedule of penalties for the following acts: unloading of goods for transshipment at improper time and place after arrival; failure to supply advance and requisite manifest; disappearance of manifested goods for transshipment; false statement of port of final destination of transshipment goods; failure to load within 30 calendar days from the date of arrival; and other violations for which delinquency no specific penalty is provided under CAO 12-2019.

In issuing CMO 15-2022, the BoC clearly aspires to provide clear, uniform and transparent procedures in the processing of goods for transshipment.

Gwendolyn Ann I. Bañaria is a junior associate of Mata-Perez, Tamayo and Francisco.

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