ST.

JUDE THADDEUS INSTITUTE OF TECHNOLOGY

Borromeo St. Surigao City

Petogo, Jake M. Mr, Chris R. Ajoc

BSCA – 1B Dept. Head/professor

Assignment in Fundamentals of Tariff System

Definition of terms:

Customs – the official department that administers and collects the duties levied by a government on imported goods.
"cocaine seizures by customs have risen this year"
the place at a port, airport, or frontier where officials check incoming goods, travelers, or luggage.
"arriving refugees were whisked through customs"
the duties levied by a government on imported goods.
Similar: import taxes, duties, levies, dues, tolls, tariffs, imposts

- Government agency entrusted with enforcement of laws and regulations to collect and protect import-revenues, and to
regulate and document the flow of goods in and out of the country. Not to be confused with custom.

Tariff– a tax or duty to be paid on a particular class of imports or exports.

1. General: Published list of fares, freight charges, prices, rates, etc.
2. Foreign trade: Popular term for import tariff and import tariff schedule.
3. Shipping: Popular term for shipping tariff And shipping tariff schedule.

-- A tariff is a tax imposed by one country on the goods and services imported from another country.
Two kinds of tariffs
A “unit” or specific tariff is a tax levied as a fixed charge for each unit of a good that is imported – for instance $300 per ton of
imported steel. An “ad valorem” tariff is levied as a proportion of the value of imported goods. An example is a 20
percent tariff on imported automobiles

Warehouse – Facility designed for temporary storage. – A large building where raw materials or manufactured goods may be
stored before their export or distribution for sale.

Custom House –the office at a port or frontier where customs duty is collected.
a government building at a port where, in the past,
the papers for goods leaving or entering a country were checked and taxes were paid

Container – an object that can be used to hold or transport something.

A container is a standard unit of software that packages up code and all its dependencies so the application runs
quickly and reliably from one computing environment to another.

Freight – goods transported in bulk by truck, train, ship, or aircraft.

transport (goods) in bulk by truck, train, ship, or aircraft.

Insurance – a practice or arrangement by which a company or government agency provides a guarantee of compensation for
specified loss, damage, illness, or death in return for payment of a premium.

Revenue – income, especially when of a company or organization and of a substantial nature.

Authorize agent bank – or AABs are financial institutions that are accredited to act as intermediaries in government
transactions. Also

Importer –
a person or organization that brings goods or services into a country from abroad for sale.
"the EU is the largest importer of agricultural products from developing countries"
a person who introduces an idea from a different place or context.
"people in underdeveloped regions have become clever importers of new knowledge"

Exporter –
a person, country, or company that sends goods or services to another country for sale.
"Brazil is the world's largest producer and exporter of sugar"
a person or group spreading or introducing ideas and beliefs to another country.
"charges have been leveled against the West since its ascension as an exporter of ideas"

Abatement – In law, the interruption of a legal proceeding upon the pleading by a defendant of a matter that prevents the
plaintiff from going forward with the suit at that time or in that form. ... The term abatement is also used in law to mean the
removal or control of an annoyance

Refund – pay back (money), typically to a customer who is not satisfied with goods or services bought.

Pier – a platform supported on pillars or girders leading out from the shore into a body of water, used as a landing stage for
boats.

Vessel – a ship or large boat. Also, The term "vessel" includes anything that floats on the water that is used, or is capable of
being used as a means of transportation on water. Therefore practically everything you encounter on the water is considered
a vessel and as such, must know, understand and abide by the Navigation Rules.

Aircraft– an airplane, helicopter, or other machine capable of flight.

Port – a town or city with a harbor where ships load or unload, especially one where customs officers are stationed.

Port of Entry – a harbor, border town, or airport by which people and goods may enter a country. Also In general, a port of
entry (POE) is a place where one may lawfully enter a country. ... International airports are usually ports of entry, as are road
and rail crossings on a land border. Seaports can be used as ports of entry only if a dedicated customs presence is posted
there

Common carrier – a person or company that transports goods or passengers on regular routes at set rates.

Bureau of Customs –The Bureau of Customs (BOC) is an attached agency of the Department of Finance. It is charged with
assessing and collecting customs revenues, curbing illicit trade and all forms of customs fraud, and facilitating trade through
an efficient and effective customs management system.

Smuggling –the illegal movement of goods into or out of a country.

Contraband –means "illicit goods" and usually refers to stuff that's imported or exported illegally, like weapons and certain
exotic pets (like tigers).

Lodgment –a place in which a person or thing is located, deposited, or lodged. Also the act of giving information to
an official organization so that it can be recorded or dealt with:
Taxpayers are increasingly using the Tax Office's online lodgment system

Coastwise port –refers to domestic port open to coastwise trade only. These include all ports, harbors and place not ports of
entry.

Coastwise/Domestic Trade - A term applied in a general sense to the trade carried on between ports of the same country.

Coastwise board –

International Airport of Entry –international airport means an airport designated as an airport of entry and departure
for international air traffic where the formalities incidental to customs, immigration, security, public health, animal and plant
quarantine and similar procedures are carried out; Civil Aviation

Consumption –the using up of a resource. "Industrialized countries should reduce their energy consumption"…. The
definition of consumption is buying and using something or how much of something has been used up.
An example of consumption is when many members of the population go shopping. ... An example of consumption is when
a person consumes 2 bushels vegetables per day.
Warehousing –the practice or process of storing goods in a warehouse. warehouses considered collectively.
Bill of lading–a detailed list of a shipment of goods in the form of a receipt given by the carrier to the person consigning the
goods.

Air Waybill –An air waybill (AWB) is a document that accompanies goods shipped by an international air courier to provide
detailed information about the shipment and allow it to be tracked. The bill has multiple copies so that each party involved in
the shipment can document it. An air waybill (AWB), also known as an air consignment note, is a type of bill of lading.
However, an AWB serves a similar function to ocean bills of lading, but an AWB is issued in non-negotiable form, meaning
there's less protection with an AWB versus bills of lading.

Manifests – manifest is a formal way to say that something is apparent to the senses and is synonymous with evident,
apparent, or clear. If you have strong feelings about something, they will be manifest on your face. A ship or
plane's manifest is the list of cargo or passengers on a particular trip.

History and Evolution of Tariff System

The word “Tariff” originated from old Spanish coast town of Tarifa, 21 miles from Gibraltar, which received its name in the
Arab who are said to named it after “Tariff Iban Malik”. This historic little town has existed far more than twelve centuries.
Like Gibraltar, Tarifa is a high promontory and is connected to the coast only by a narrow cause way, easily defended. When
the moors, many centuries ago, founded the town of Tarifa, they prepared the way for a system that is probably the most
important factor in the international trade. As the name suggest, this factor is the tariff.

In the days when commerce began to expand from the Mediterranean, a gang of racketeers made Tarifa their headquarters,
held up all merchant ships at this point and levied tribute according to a fixed rate on all merchandise passing in and out of the
Straits of Gibraltar. The mariners called this tribute a tariff and the word became current in England whose vessels formed the
majority in the merchant trade. The word has adopted, doubtless for same reason, into the Spanish tarifa (price list, rate book)
Portuguese tarifa (schedule), French tarifa or tariff rate and Italian tarifa (price list), the government of Europe began to make
similar levies on imports and tariff became a prolific source of revenue. The tariff system was already established in the Old
World when the American colonies were founded.

In the days of the Moors, the tariff was little better than to hold up. The fierce fighters of Tarifa levied at will. Because of its
position, steady and fruitful source of revenue it controlled, Tarifa was the scene of much warfare and changed hands many
times in its early history.

TARIFF DISTINGUISHED FROM CUSTOMS

“Tariff” may be distinguished from “customs” although the two are often used interchangeably.

TARIFFS – a term found in many languages, denotes the list of schedules of commodities with the particular duties or charges
upon each.

CUSTOMS – is the English term which originally denoted all “customary” tolls or dues paid by merchants upon commodities on
their way to and from the market, not necessarily differentiated by the class of goods, for the benefit of the king, lord, local
government of the authority. In the course of time, as the national state became the dominant economic as well as political
unit, the complex structure of multiple local and provincial tolls on trade was substantially replaced by those levied only upon
crossing the frontier of the country. The Term then became restricted, in most centuries by the late 18th or early 19th century,
to taxes on importation or exportation of commodities across national boundaries.

MODERN CUSTOMS TARIFF, DEFINED

Modern customs tariffs are a systematic arrangement of customs duties levied on goods when they cross the border of a
political unit. They are an official list of schedule setting forth the several customs duties to be imposed on imports and export
of goods in transit. Import duties are by far the most important these modern tariff changes, because practically no self-
governing nation is entirely free of it. For example, the Philippine Tariff Act of 1903, was an import tariff.

Tariff exerts a profound influence upon international trade. They have become an important issue in the affairs of nations.
World peace and harmony are influenced to no little extent by tariffs.
HISTORY OF PHILIPPINE TARIFF

I. Philippine Foreign Trade during the Pre-Spanish Period

Long before the history of the Philippines by Magellan, the ancient Filipinos were already trading with China, Japan, Siam
(Thailand), Cambodia, Indonesia, Burma, Sumatra, Java and other neighboring islands. An interesting Spanish document of
1586 narrated that they “are keen traders and have traded with China for many years, and before the advent of the Spaniards
they sailed to Mulloco Malacca, Hazian (probably Anchen, Sumatra), Parani, Brunie and other kingdoms.”

The customary way of trading with other people was by barter in which the Filipinos offered their home products in exchange
for the products of other countries. Sometimes a price was fixed for the commodities which was paid in gold as agreed upon or
in metal bells (gongs) brought from China. The Chinese writers Chao Ju-Kua (1209-1214) and Wang Tay –Uan(1349) observed
that the ancient Filipinos were honest in the commercial dealings.

History records show that even before the arrival of Magellan in the Philippines, Chinese, Japanese and other foreign traders
who brought silks, woolens, bells, porcelains, perfumes, iron tin, colored cotton cloth and other small wares to the country
paid tariff duties on them.

II. Spanish Period

As soon as the Islands were acquired by Spain, the ancient almojarifazgo (a three (3) percent ad valorem duty) imposed on
both imports and exports was amplified to the Philippine customs house and was established in Manila by Governor Guido R.
de Lavizares in 1573. However, according to the report of the Viceroy of Mexico to the Spanish King of 1573, the governor-
general did not enforce the almojarifazgo at once. It took Gonzalo Ronquillo de Penalosa, the fourth Spanish governor-general
to impose the almojarifazgo in 1582. Duty on Chinese goods was increased to six (6%) percent in 1606.

It was not until more than two and half centuries later that other ports of the archipelago were opened to foreign commerce.
Zamboanga was opened in 1833, Cebu in 1842, Iloilo and Sulu in 1855 and Legaspi and Tacloban in 1874.

Philippine exports consisted mainly of rice, coconuts, palm oil, sugar, fiber, straws, cane, dyewoods and lumber and luxuries
such as sea snails, beches defmerk, edible bird’s nests, tortoise shell, pearls and mother-of-pearls shells. These goods were
brought to China by Chinese junks which in turn carried to the Philippines, cotton, grass linen, silk, iron and iron implements,
households utensils and manufactured wares.

These Chinese wares were later on shipped to Mexico to be sold, the proceeds of which were made to cover the regular
contribution of Mexican US$250,000.00 for support of the insular treasury. Luxury items sent to Mexico included silks fine
woven fabrics of Persia and India, gold, silver and spices.

The galleons brought back to Manila Mexican dollars, Spanish wines and manufactures which gave a profit of 100% to 400%.
All foreign commerce was required to be carried in government vessels except those with China, Japan and other oriental
countries. Not until 1834 when Philippine trade was opened to the world and ships other than those of Spain permitted to
share in Philippine commerce.

The Customs house became a distinct department in 1779 and was made an independent branch of the Treasury in 1805.
While duties in theory is ad valorem, they were in reality specific by the fixing of arbitrary values. Prior to 1734, these values
were assessed by a board composed of a royal officer and two merchants with a royal fiscal as intervenor.

In 1734 a permanent board of valuation called as “Junta de Valoraciones”. This was abolished in 1782, followed by tariff board
in 1828 called “Junta de arancelus”. Trade during the interim was in the hands of Compania Real de Filipinas.