MALACANAN PALACE MANILA. BY THE PRESIDENT OF THE PHILIPPINES ADMINISTRATIVE ORDER NO. EXPANDING THE COVERAGE OF ADMINISTRATIVE ORDER NO. 243-A, AS AMENDED, WHICH AMENDED ADMINISTRATIVE ORDER NO. 243 ENTITLED “CREATING A SYSTEM FOR THE BULK AND BREAK BULK CARGO CLEARANCE ENHANCEMENT PROGRAM OF THE BUREAU OF CUSTOMS,” TO INCLUDE CONTAINERIZED CARGOES WHEREAS, AO No. 243-A, series of 2009, as amended, was enacted to setup an advance clearance system for bulk and break bulk cargoes in accordance with the objectives of the World Customs Organization Intemational Convention on the Simplification and Harthonization of Customs Procedures, otherwise known as the Revised Kyoto Convention; : WHEREAS, AO No. 243-A, series of 2009, was enacted to facilitate the assessment by the Bureau of Customs (BOC) of bulk and break bulk cargoes by harnessing available technical support at no cost to the government which is vital to ensure the protection of revenue collection; WHEREAS, there is 2 need to, expand the present coverage of the advance clearance system for bulk and break bulk cargoes by including containerized cargoes, to promote trade facilitation, transparency, and protect the Filipino consumers; WHEREAS, there is a need to obtain and secure critical and vital information for the proper examination, classification, and valuation of bulk and break bulk and containerized cargoes using measures compliant with customs international best practices and global trade standards at no cost to the government; WHEREAS, there is a need to establish a system that shall directly address the pestering issue of corruption, inefficiency and smuggling in the BOC by adopting a comprehensive procedure that ensures transparency, consistency and reliability in the cargo clearance process thus eradicating any and all forms of graft, corruption and other forms of fraud against the government thereby ensuring maximum revenue collection by the said Bureau; WHEREAS, there is a need to define the responsibility, accountability, and liability of accredited cargo surveying companies/surveyors pursuant to the State policy of full public disclosure of all transactions involving public interest; WHEREAS, under Section 31(2), Chapter 10, Title Ill of Executive Order No. 292, otherwise known as the Administrative Code of 1987, the President is granted the authority to reorganize the executive branch of the government;WHEREAS, the Department of Finance (DOF), being the department primarily concerned with revenue collections, has the major oversight and supervising functions on trade facilitation, border protection against anti-social goods and assessment of all cargoes regardless of their arrival condition whether they arrive in the country as bulk, break bulk and/or containerized cargoes, WHEREAS, the President, under Article Vil, Section 17 of the Constitution, has the power of control over executive departments, bureaus, and offices, and the duty to censure that laws are faithfully executed, NOW, THEREFORE, |, RODRIGO R. DUTERTE, President of the Republic of the Philippines, by virtue of the powers vested in me by law, hereby order: SECTION 1. DEFINITION OF TERMS - For purposes of this Administrative Order, the following terms as used herein shall be defined as follows: a. COMMITTEE FOR ACCREDITATION OF CARGO SURVEYING COMPANIES (CACSC) - A Committee tasked and authorized to grant and approve the accreditation of cargo surveying companies/surveyors and periodically review the performance thereof ‘ b. CARGO SURVEYING COMPANY - A reputable company with an international office network in the countries exporting to the Philippines, particularly at the ports of origin and engaged in the business of cargo surveying of shipments. ¢. ACCREDITED CARGO SURVEYING COMPANY (ACSC) - A surveying company possessing a duly approved accreditation issued by the CACSC. d. BULK CARGO - Cargoes in a mass of one commodity not packaged, bundled, bottled, or otherwise packed; cargoes (dry or liquid) loaded (shoveled, scooped, forked, ‘mechanically conveyed or pumped) in volume directly into a vessel's hold or cargo that is unbound as loaded, without count in a loose unpackaged form. @. BREAK BULK CARGO - Non-containerized general cargo stored in boxes, bales, pallets, or other individual units to be loaded onto or discharged from vessels; cargoes loaded individually and described in terms of quantity and weight (e.g. steel coils, logs, sacks of rice), and not in shipping containers nor in bulk as with oll or grain. {, CONTAINERIZED CARGO - Cargo that is transported by sea using standard ISO containers, with common standard lengths of 10 feet (3.048 meters), 20 feet (6.1 meters), 40 fect (12.2 meters), and 45 feet (13.7 meters), and including open top or closed top, flat rack, Full Container Load (FCL) and Less Container Load (LCL). g. TWENTY-FOOT EQUIVALENT UNITS (TEU) - A TEU is a measure of containerized cargo capacity equal to one standard 20 fi. x 8 ft. container. h. FORTY-FOOT EQUIVALENT UNITS (FEU) - An FEU is a measure of containerized cargo capacity equal to two (2) TEUs. i, CARGO SURVEYING - The inspection, analysis, and identification of cargo, whether bulk, break bulk, or containerized, for the purpose of determining the correct 2weight, quantity, quality, and description of goods in tariff terms for the correct assessment of duties thereon j, DISCHARGE PORT SURVEY (DPS) - A cargo survey conducted by an ACSC at Port of Discharge or Destination. k. DISCHARGE PORT SURVEY REPORT (DPSR) - A report issued by an ACSC for the survey of imported cargoes at the Port of Discharge and submitted to the Bureau of Customs (BOC). |. LOAD PORT SURVEY (LPS) - A cargo survey conducted by an ACSC at the country of Supply or Export and in the case of containerized cargo inspection, cargo surveying is conducted at the place of container stuffing which will allow an ACSC to affix its security seal. m. LOAD PORT SURVEY REPORT (LPSR) - A report issued by an ACSC for the survey of imported cargoes at Port of Supply or Export and submitted to the Bureau of Customs (BOC). n. HIGH-RISK SHIPMENT - Any shipment that falls to submit itself to load port survey inspection at the port of loading or does not have a Load Port Survey Report (LPSR) at the time of its arrival in the Philippines shall be considered as a high-risk shipment and shall be placed under automatic alert/hold order status and subjected to 100% percent examination. ©. CUSTOMS SURVEY INSPECTORS (GSI) — An inspection team composed of BOC officers and personnel with special qualifications and technical training in cargo inspection and surveying. SECTION 2. COVERAGE - This Order shall cover all cargo destined for the Philippines, except the following: 2) Importation of personal effects and household goods of a balikbayan and his or her family under R.A. No. 6768, as amended; b) Official importations of foreign embassies, legations offices, and other agencies of foreign governments in the Phil the requisite indorsement from the DOF; missions, consular 1es when covered by c) Time-sensitive importations such as blood and blood components for transfusion, human organs, cells and tissues for transplant, and medicines which pass through terminal release procedures at airports; 4d) Mails, letters, cards, correspondences and other printed matters passing through the Philippine Postal Corporation (Philpost), including documents and low-value non-document parcels carried by express couriers; ) Human remains and personal effects of the decedent accompanying the human remains; and,f) Cargoes transiting the Philippines and intended for a foreign destination, including shipments which are discharged from the carrying vessel and loaded onto another ocean-going vessel for its final destination abroad. SECTION 3. CREATION OF COMMITTEE FOR ACCREDITATION OF CARGO SURVEYING COMPANIES (CACSC) - An accreditation committee directly under the supervision and control of the Office of the President is hereby created, hereinafter known as the Committee for Accreditation of Cargo Surveying Companies or CACSC, to be composed of the following: a. Secretary of Finance or his authorized representative, who shall be the Chairman of the Committee; b. Commissioner of Customs or his authorized representative; Two (2) authorized representatives from the Department of Trade and 5) Industry, and (@) Two @) authorized representatives of duly recognized industry \Y associations as non-voting members upon nomination by the Secretary of the Department of Trade and industry; SECTION 4, POWERS AND FUNCTIONS OF THE CACSC - The CACSC shall have the following powers and functions: a. To grant, approve, defer or deny the application for accreditation of Cargo Surveying Companies/Surveyors and/or allow the renewal of the same upon expiration; b. To enlist the assistance of any department, bureau, office or agency of the government in carrying out its funetions; c. —Toregularly review the performance of the duties and obligations of accredited cargo surveying companies! surveyors in compliance with laws, rules and regulations; d. To perform such other function relative to its creation and in accordance with the provisions of this Order. SECTION 5, CACSC SECRETARIAT - The CACSC shall be assisted and supported by the CACSC Secretariat which shall receive and process all applications for accreditation and renewal of accreditation of surveying companiesisurveyors for consideration and approval by the Committee. in addition, the Secretariat shall Keep a record of all documents pertaining to the CACSC and accredited cargo surveying companies, SECTION 6. QUALIFICATIONS FOR ACCREDITATION - Applications for accreditation must have the following basic qualifications: a Minimum track record of five (5) continuous years in Intemational Cargo Surveying; b. Membership of good and reputable standing in the IFIA or any other similar ‘organization generally recognized and accepted in international commerce; ¢. _ Infernational office network in countries which export to the Philippines as shown in the updated company profile and organizational structure; d. Must possess and maintain the basic tools and implements needed in cargo surveying, and must have the competence and capability to conduct qualitative 4analysis of cargo using its own laboratories or laboratories generally used for such purpose in country of origin; fe. Must be capable of receiving and transmitting electronic instructions from authorized ship agents, importers or responsible customs officials; f. Must be able to issue reports and certificates in such forms acceptable to the CACSC; g. Must not have been blacklisted, barred from doing business with or its services terminated by any government or international entity in the immediately preceding three (3) years, on the grounds of poor performance, bribery, corruption and/or irregularity in dealings, unless proven otherwise by ‘competent and verifiable evidence as considered by the CACSC; and h. Must be able to submit a comprehensive capacity building program for the BOC officials/employees and other government officials who will be directly involved in the implementation of this program. SECTION 7. DOCUMENTARY REQUIREMENTS - The following documentary requirements shall be submitted before any application for accreditation shall be processed: a. Certified copies of Articies of Incorporation or Certificate of Registration; b. Local Business Permit; . Cerfified list of not less than twenty (20) regular clients-importers and exporters for the last three (3) years immediately preceding the application; . Certified copy of its Audited Financial Statements submitted to the Securities and Exchange Commission, Bureau of intemal Revenue or equivalent office for the immediately preceding year; e. Cerified copy of the updated list of its corporate officers and surveyors; 4. Certified copy of the BIR Certificate of Registration; . Authenticated copies of the Membership Certificate issued by the International Federation of Inspection Agencies (IFIA) of any other similar organization generally recognized and accepted in international commerce; h. Certification under oath by a responsible official of the company that it has not been blacklisted, barred from doing business with or its services terminated by any foreign government or international entity on the grounds of poor performance, bribery, corruption and/or irregularity in dealings in any ‘country, three (3) years immediately preceding the application; i. Certification under oath by a responsible official of thé company that it has no pending administrative, civil or criminal case in any court or venue in the Philippines: and, j. Such other documents as may be required by the CACSC. All documents obtained abroad shall be duly notarized by the Philippine Consular Office concerned before they shall be submitted or acceptable to the CACSC. SECTION 8. PERIOD TO APPROVE APPLICATION - the CACSC shall approve or disapprove all applications for accreditation within thirty (30) days from receipt of said application accompanied by complete documents in accordance with the requirements for accreditation.SECTION 9. REQUIRED VOTING - No application for accreditation shall be approved or disapproved without the consent of a majority of the members present in @ valid meeting duly called for such purpose by the Chairman of the Committee. ‘A meeting is valid when at least three (3) members of the committee are present, SECTION 10. EFFECTIVITY OF ACCREDITATION - The accreditation of surveying companiesisurveyors shall be effective for a period of three (3) consecutive years, unless sooner revoked for a cause. SECTION 11. RENEWAL OF ACCREDITATION - Applications for renewal of accreditation shall be filed not earlier than ninety (90) calendar days but not later than thirty (30) calendar days prior to the date of expiration of accreditation. A penalty as determined by the Committee shall be imposed on applications filed beyond the prescribed period. SECTION 12,NON-RENEWAL OF SUSPENDED OR REVOKED ACCREDITATIONS - No application for renewal of accreditation shall be accepted if the Certificate of Accreditation has been suspended or revoked unless subsequently lifted by the CACSC. SECTION 13, ACCESS TO INFORMATION - The CACSC shall have the authority to secure information, documents, correspondence and materials necessary in the performance of its oversight functions. Information of proprietary nature obtained by ‘an accredited cargo surveying company in the performance of its surveying functions or ‘any other activity incidental thereto shall be provided to CACSC only upon written request and shall be treated with utmost confidentially at all times. The CACSC shall make the electronic surveyor reports submitted by the accredited cargo surveying companies/surveyors electronically accessible in real time by the Office of the President, the Secretary of Finance, and/or such other Cabinet members or officials as may be authorized by the President. All information submitted by the accredited cargo surveying companies/surveyors and/or accessed by the foregoing government officials shall be treated confidentially and may not be used for any other purpose other than to implement the provisions of the Tariff and Customs Code of the Philippines (TCCP), Customs ‘Modernization and Tariff ‘Act (CMTA) and other related rules and regulations, ‘The CACSC shall establish and maintain an Information and Communications Technology (ICT) system that would ensure accountability of the ering government official who may have allowed, intentionally or negligently, unauthorized access to the information submitted by the accredited cargo surveying companies/surveyors or may have been the source of any leakage thereof to unauthorized persons or the public. For this purpose, any information obtained without authority shall be inadmissible in evidence and will subject the public official or employee concemed to administrative and The foregoing, notwithstanding, CACSC shall, upon proper consultation and coordination with the National Statistics Office, adopt the necessary procedure that shall ‘govern the process of dectassifying all information obtained by the BOC in the course of this program for educational, economic planning and statistical purposes. 6SECTION 14, COVERING REPORT - CACSC shall design, manage, and implement @ uniform Summary Survey Report, hereinafter referred to as Load Port Survey Report (LPSR), containing a digest of the information gathered during the survey, including but not limited to the name of the buyer and seller, their respective addresses, description of the imported goods or article in tariff terms, weight, measure, quantity of quality thereof, value declared, tariff heading declared, the particulars of the Free Trade Agreement (FTA) form availed of, if any, and such other information useful in the determination of the correct Transaction Value of the shipment. SECTION 15. VIOLATION/PENALTIES - Any violation of any of the provisions of this Order or its implementing rules and regulations shall be grounds for the initiation of appropriate actions against the cargo surveying company, without prejudice to the filing ‘of appropriate administrative, civil or criminal charges against erring cargo surveying companiesisurveyors. In addition, any shipment arriving in the country without undergoing Load Port Survey Inspection or has no Load Port Survey Report (LPSR) submitted in accordance \with this Order and its Implementing Rules and Regulations (IRR) shall be deemed to be fa high risk shipment and shall be subject to a rigid 100% examination and other ‘safeguard measurés to be adopted by the BOC. SECTION 16. BENEFIT TO IMPORTER - All shipments duly covered by LPSR shall be entitled to advance filing of Import Entry & Internal Revenue Declaration (IEIRD) and advance clearance procedures to be adopted by BOC. ‘Shipments examined by the ACSC at the loading port shall prima facie be deemed to ave been examined for customs purposes and shall be automatically exempted from physical and x-ray inspection upon arrival in the country except in the following instances: a. The LPSR andlor container security seal is missing or has been tampered or shows signs that the same has been tampered; b. The shipment is subject of an Alert Order; c. The importer disagrees with the findings of the LPSR and requests that a DPS be conducted in the presence of customs officers; ~ 4d. If the Commissioner or District Collector has derogatory information against the shipment; and e. Ifthe LPS was conducted by a non-accredited cargo surveyor. ‘Shipments classified under the above exceptions shall be subject to customs control and procedures to be defined by the Commissioner of Customs in the Implementing Rules and Regulations (IRR) and operational regulations of this Order SECTION 17. CAPACITY BUILDING - Accredited Cargo Surveying Companies shall adopt capacity building measures for the BOC using as basis the current Strategic Plan of the latter.SECTION 18. CUSTOMS SURVEY INSPECTORS (CSI) - The BOC shall establish a Customs Survey Inspection (CSI) Service, to be composed of teams of Customs Inspectors and other personne! with special qualifications and technical training in cargo inspection and surveying and capable of rendering efficient and reliable survey or examination reports, and to be headed by a senior BOC official with compensation of at least Salary Grade 21. The CSI Service shall be tasked to: 2) Recruit candidates from among the operations personnel who are qualified to become part of the CS! teams; b) Ensure that the CSI teams acquire and possess sufficient technical know- ledge of survey inspections of shipments usually imported within their respective assigned collection districts, ©) Accompany the personnel of accredited surveying companies/surveyors in the survey inspections of shipments requested to undergo Discharge Port Survey (DPS); ) Acquire tools and equipment and effectively utiize them in the conduct of survey inspections of shipments requested to undergo Discharge Port Survey (OPS); e) Conduct technical survey of shipments that are already covered by Load Port Surveys, but are further requested to undergo confirmatory surveys for purposes of determining their actual condition, weight or measure, quantity and quality but excluding laboratory analysis; and ) Perform such other functions and duties for the effective implementation of this program. SECTION 19. AUTOMATION MEASURES - Accredited Cargo Surveying Companies shall adopt comprehensive automation measures to effectively carry out the goals and objectives of this program and shall provide the BOC the necessary software and hardware components thereof that will allow the integration of data sourced from the port of loading through the covering reports required under Section 14 of this Order with the data as filed by the importers with the BOC in the form of Import Entry & Internal Revenue Declaration (IEIRD). For this purpose, BOC Management Information System and Technology Group (MISTG) shall develop a computer based program that shall enable the E2M and/or National Single Window (NSW) system of the BOC to generate 2 comprehensive report on a daily, weekly, monthly, quarterly and yearly basis that shall show the volume, value, and revenue collected on each commodity as per their respective tariff lines. SECTION 20. IMPLEMENTATION STRATEGY - The BOC shall design and implement a phased implementation strategy that will ensure the viability and effectiveness of the program. SECTION 21. IMPLEMENTING RULES AND REGULATIONS - Within the thirty days from the effectivity of this Order, the Commissioner of Customs shall issue the Implementing Rules and Regulations (IRR) and operational regulations of this Order. SECTION 22, TRANSITORY PROVISION - For the smooth transition from the present containerized cargo clearance procedures in place at the BOC to the actual implementation of this Program, the following procedures shall be strictly observed:8) Without need of filing a separate application for accreditation under this Program, ACSCs participating in the current Bulk and Break Bulk Cargo Clearance Enhancement Program (BBECCEP) of the BOC shall be recognized as the duly approved cargo surveying companies tasked to do Load Port Survey of all containerized cargo destined to any Port in the Philippines, provided that the ACSCs under the Bulk and Break Bulk Cargo Clearance Enhancement Program of the BOC, comply with the Qualifications for Accreditation required under Section 6 of this Order; b) The Transitory Period for the Program under this Order is Three (3) months ‘counted from the date of its effectivity; ‘c) The reckoning date to determine as to when all containerized shipments shall be subject to Load Port Survey inspection, shall be the B/L date of the containerized shipment which immediately follows the lapse of the Transitory Period: 4) Within the said Transitory Period, the Commissioner of Customs shall issue the necessary orders through Customs Memorandum Orders or Unnumbered Memoranda including the schedule of on the job trainings of CSI Team members across the country and equipping them with the necessary tools for the job through the capacity building programs of participating ACSCs. SECTION 23. SEPARABILITY CLAUSE - If any provision or part hereof is held invalid or unconstitutional, the remainder of the order or the provision not otherwise affected shall remain valid and subsisting. SECTION 24. REPEALING CLAUSE - All other orders, issuances, rules and regulations or parts thereof which are inconsistent with this Administrative Order are hereby repealed or modified accordingly. SECTION 25. EFFECTIVITY - This Order shall take effect fifteen (15) day after its complete publication in a national newspaper of general circulation. DONE in the City of Manila, this_ day of. Lord, Two Thousand and Seventeen. in the year of Our By the President: SALVADOR C. MEDIALDEA Executive Secretary