CUSTOMS BONDED WAREHOUSING
supervise its activities.
CBW
A building or other secured area in which dutiable goods
may be stored, manipulated, or undergo manufacturing
operations without payment of duty and/or tax (Nague).
It includes the premises, rooms, compartments, and
other areas necessary for storing, processing, repacking
and manufacturing imported raw materials and the by-
products or wastages incident to such activities (CAO 2-
91)
CLASSIFICATION OF WAREHOUSES
A. AS TO OPERATION
1. Plain storage;
a. Public Bonded Warehouse;
b. Private Bonded Warehouse;
2. Manufacturing for export;
a. Customs Common Bonded Warehouse
(CCBW)
b. Garment/Textile Manufacturing Bonded
Warehouse GTMBW)
c. Miscellaneous Manufacturing Bonded
Warehouse MMBW)
3. For storage and transfer
a. Industry-Specific Customs Bonded
Warehouse (ICBW)
Warehouse licensed by the BOC to
import under bond and under its name
and account, raw materials (except
fabrics and accessories for the
manufacture of garments) for storage
and subsequent sale/transfer to:
a.1. Licensed client/end-user;
a.2. CBMW;
a.3. PEZA or Freeport Locator
b. Multinational Regional Bonded
Warehouse (MRBW)
A warehouse licensed facility to serve
as a supply depot for the storage of
raw materials including packing, to fill
up transactions and/or sales made by
its office or parent companies and to
serve as storage of goods purchased
locally by home office of the
multinational for export abroad under
the supervision of the BOC.
B. AS TO SUPERVISION OF ACTIVITIES
1. Ordinary Customs Bonded Warehouse
(CBW)
A traditional warehouse where a customs
bonded warehouseman, storekeeper and CBW
Guards among others may be assigned to
2. Open Bonded System
Operation of CBW wherein tracking and
monitoring of goods are done by means of
computer system.
SPECIAL BONDED WAREHOUSE
1. Airline Customs Bonded Warehouse (ACBW)
Caters to the needs of international air carriers
operating in the country.
COMMON PROVISIONS,
RULES AND REGULATIONS
TO ALL CBWs
TERRITORIAL PREMISES of CBWs
A CBW and variants thereof include the surrounding
premises within its perimeter fence per approved
application, rooms, compartments and other areas
NECESSARY and EXCLUSIVELY USED for storing,
processing, repacking and manufacturing imported raw
materials and the semi-finished product, by-products,
wastages and rejects incident to such activities.
No other establishment shall be allowed except upon
proper approval of the BOC.
LOCKS AND KEYS
The door/entrance to a CBW and the designated
compartments for raw materials, finished goods and
wastages, rejects and by-products shall have 2 locks
each. One set shall be maintained by the CBW
Warehouseman (customs employee) and the other by
the CBW operator.
All DUPLICATE KEYS for locks, held by the customs
warehouseman shall be kept by the Chief, Operating
Division concerned.
LICENSING, SUPERVISION, CONTROL
The BOC is responsible for the licensing, supervision
and control of all CBWs including its extension
warehouses, licensed members and licensed
subcontractors.
Subcontractors located in PEZA or Freeports shall be
subject to monitoring by the BOC upon proper
coordination with the relevant government agency.
APPLICATION FOR A LICENSE
The application to operate a CBW, including its
member, subcontractor or end-user/client, shall be
submitted to the Commissioner of Customs THROUGH
the District Collector of the port for evaluation by the
BWC, except the application to operate a Multinational
Bonded Warehouse, which shall be filed with the BOI.
The approval of the application to operate a Multinational
Regional Bonded Warehouse, upon recommendation of
the BOC, shall be IN ACCORDANCE WITH THE BOI
RULES AND REGULATIONS.

Notes:
1. Bonded Warehousing Committee
(BWC) is the customs committee
created to act on applications for the
establishment, operation and renewal of
licenses to operate CBW of CBW;
application as a member of a CCBW;
application as a subcontractor of a CBW
and other related matters;
2. The application must be accompanied
with such relevant documents such as,
but not limited to, BOI, DTI, Freeport
Authority, PEZA and other applicable
agency indorsement as well as
indorsements from relevant business
industry association or federation;
3. If the applicant is already a BOC-
accredited importer, the CARE
certificate together with the Information
Validation Service Provider’s (IVSP)
recommendation shall be submitted
together with the application (CAO 1-
2009).
EVALUATION OF THE APPLICATION
Within 5 days from receipt of the application to operate,
the District Collector of the port shall pass upon the
merits of the application prior to submission to the BWC.
Within 15 days from receipt of the indorsement from the
District Collector concerned, the BWC shall further
evaluate (final evaluation) the application and make the
necessary recommendation.
APPROVAL OF THE APPLICATION
Within 15 days from receipt of the BWC indorsement,
the Commissioner of Customs shall act on the
application. The approval shall be evidenced by a
certificate of License to Operate.
Such certificate shall be conspicuously displayed at all
times at the CBW’s office.
Customs Certificate of License is a document signed
by the Commissioner of Customs AND the District
Collector of Customs of the Port, issued to an enterprise
with an approved authority to either operate a CBW; to
be licensed member; licensed subcontractor; or licensed
client/end-user stating its:
a. Name;
b. License number;
c. Exact office and warehouse address;
d. Date of grant and expiry of license;
e. Type of the approved warehouse.
Note: The certificate of license is renewable
every 2 or 3 years, as the case maybe,
after proper re-evaluation and favorable
recommendation by BWC.
NON-TRANSFERRABILITY OF THE LICENSE
The license to operate a CBW is PERSONAL to the
warehouse and shall not be transferred or assigned for
whatever reason.
RENEWAL OF THE LICENSE
Application for renewal of CBW license shall be filed
every 2 years with the BWC through the District
Collector of the port.
A Certificate of Renewal of License shall be issued for
every renewal.
CBWs or accredited members who fail to file their
application for renewal of license and/or accreditation at
the required cut-off time of 60 days before expiration
date shall be considered CLOSED at the end of the term
and any account outstanding at the time of the expiration
must be liquidated within 30 days therefrom(CMO 40-
2010).
Applications for renewal filed within 60 days before
expiration date shall be treated as NEW
APPLICATIONS. (CMO 40-2010).
Importations of CBWs whose application for renewal has
not yet been granted by the Bureau at the expiration of
the original term shall be subjected to payment of the
duties and taxes before they are released (CMO 40-
2010).
The APPLICATION FOR RENEWAL shall be
accompanied by the following:
a. Annual stock inventory indicating thereon their
respective ages;
b. Proof of payment of the current warehousing
fee;
c. Updated amount and kinds of bonds;
d. Revised formula of manufacture, in case of
changes from that originally submitted;
e. Certificate from the Securities & Exchange
Commission (SEC) that the applicant did not
apply for dissolution of the corporation or that
the applicant firm has been dissolved (CMO 39-
91 as amended by CMO 13-2004).
VISITORIAL POWER OF THE BOC
The visitorial power of the BOC extends to all CBWs,
including their extensions, licensed members, end-
user/clients and subcontractors.
In case of end-user/clients or subcontractors located in
PEZA or Freeport, the exercise by the BOC of its
visitorial power shall always be with PRIOR NOTICE to
the locator/enterprise concerned and limited to a
specific transaction through proper coordination with
the appropriate government agency.
CPRS ACCREDITATION OF CBWs
(and CY-CFS-OCZ)
PROCEDURES
The CBW or ODCC concerned shall file its request for
CPRS accreditation with the office of the Deputy
Commissioner for AOCG.
The Deputy Commissioner directs the Evaluation
Committee to evaluate the existing customs
accreditation or registration records (201 files) of the
CBWs or ODCCs and compare these with the electronic
submissions made by said CBWs or ODCCs through
their VASPs.
The Evaluation Committee recommends to the Deputy
Commissioner as to whether or not the CPRS
accreditation of the CBW or ODCC may be made or the
reasons why the same cannot be entered into the
system.
In case the CPRS accreditation cannot proceed, the
reasons therefor shall be conveyed in writing to the
applicant, through the VASP, in order that it may act
accordingly.
If the reasons for the failure of the original application
has been addressed and the conditions set for entry into
the system have been complied with, the applicant shall
notify in writing the Deputy Commissioner in order to
restart the accreditation process (CMO 30-2009)
WITHDRAWAL FROM THE CBW
Imported articles may be withdrawn from the warehouse
either for:
a. manufacture into export products;
b. repacking for distribution to foreign markets;
c. for sale to manufacturing bonded warehouse;
d. for transfer to subcontractors or members;
e. domestic consumption.
TRANSFER OF ARTICLES TO CBW
Unless the District Collector allows direct transfer,
articles imported by CBWs shall be examined, appraised
and bonds filed before these are transferred.
Transfers of articles to CBWs shall be through a
warehousing entry OR a transit declaration.
In case of transit, the CBW operator shall file the
warehousing entry within 5 days from date of receipt of
the articles at the warehouse.
GENERAL RULE. Transfer of articles from the customs
zone to the warehouse shall be under continuous
underguarding until delivery at the CBW is
acknowledged by the assigned customs personnel or the
duly designated accountable officer (CAO 1-2009).
NOTE. Under CMO 23-2010, direct transfer
from the vessel to CBW-member’s plant of
butane, ethylene and similar raw materials
is justified on account of the nature of such
raw materials.
VIOLATIONS/PENALTIES AND LIABILITIES
1. Sec. 1418. Affixing Seals. – Any person
who, without authority, affixes or
attaches a customs seal, fastening, or
any mark, or fastening purporting to be
a customs seal, to any vessel, aircraft,
vehicle, warehouse, or package, shall
be penalized with imprisonment of not
less than six (6) months and one (1) day
but not more than one (1) year, and
shall be liable for a fine of not less than
one hundred thousand pesos
(P100,000.00) but not more than three
hundred thousand pesos (P300,000.00).
If the offender is a foreigner, the
offender shall be deported after serving
the sentence. If the offender is a public
officer or employee, the offender shall
suffer an additional penalty of perpetual
disqualification to hold public office and
disqualification from exercising the right
to vote and to participate in any election.
2. Sec. 1421. Removal, Breakage, and
Alteration of Marks. – Any person who,
without authority, willfully removes,
breaks, injures, defaces or alters any
customs seal or other fastening or mark
placed upon any vessel, vehicle, on
land, sea or air, warehouse or package
containing merchandise or baggage in
bond or in customs custody, shall be
punished with the penalty prescribed in
Section 1420 hereof.
3. Sec. 1423. Removing or Repacking
Goods in Warehouse. – Any person who
fraudulently conceals, removes, or
repacks merchandise in any warehouse
or fraudulently alters, defaces, or
obliterates any mark or numbers placed
upon packages deposited in such
warehouse, or shall aid or abet any such
acts, shall be punished with the
penalties prescribed in Section 1418
hereof. Merchandise so concealed,
removed, or repacked, or packages
upon which marks, numbers or the
values thereof have been so altered,
defaced, or obliterated shall be forfeited
in favor of the government.
4. Sec. 1424. Removing Goods from
Customs Custody. – Any person who
enters any warehouse, or any vehicle
loaded with or containing merchandise
with intent to unlawfully remove
therefrom any merchandise or baggage
in such vessel, vehicle or warehouse or
otherwise in customs custody or control,
or any person who receives or
transports any merchandise or baggage
unlawfully removed from any such
vessel, vehicle or warehouse, or shall
aid or abet such removal, shall suffer
the penalties provided in Section 1401
hereof.
CLOSURE OF THE CBW
A CBW may be closed by the Commissioner upon
recommendation of the BWC on any of the following
grounds:
a. Failure to file application for renewal;
b. Filing an application for renewal found to contain
false information;
c. Being inactive for at least 1 continuous year (i.e.
no importation, or if there is one, no
corresponding legal withdrawal of imported
goods or exportation of finished products;
d. Upon written request of the operator;
e. Violation of customs rules and regulations.
Note. Upon closure of the CBW, all goods inventoried in
the CBW shall be transferred to the security warehouse
of the BOC unless the duties and taxes have already
been paid.
PUBLIC and PRIVATE
BONDED WAREHOUSE
 NOTE. The bonded warehouse officers and
PRELIMINARIES other employees shall be regular customs
employees who shall be appointed in
Public Bonded Warehouse accordance with the Civil Service Law, rules
and regulations.
A warehouse licensed by the Bureau of Customs to
receive and store general cargoes for exportation, RESPONSIBILITY OF OPERATORS
transfer to another CBW or for local consumption.
The operators of bonded warehouse shall be liable for
Articles withdrawn for local consumption shall only be the payment of duties and taxes due in case of loss of
withdrawn upon payment of the assessed duties, taxes the imported articles so stored.
and other charges.
The government assumes no legal responsibility in the
Private Bonded Warehouse; safekeeping of articles in any customs warehouses,
sheds, yards or premises.
A warehouse licensed by the BOC to import and store
supplies for its production intended for domestic PRE-OPERATION REQUIREMENTS (BAB 25)
consumption, withdrawal of which shall be made only
upon payment of duties, taxes and other charges due 1. Filing of performance BOND with the
thereon. District Collector of Customs to guarantee
compliance with laws, rules and
ESTABLISHMENT AND SUPERVISION OF regulations and the following:
WAREHOUSES
a. The principal shall deliver the
The Collector, subject to the approval of the imported merchandise stored in
Commissioner, shall designate and establish the warehouse only upon release
warehouses- by the Collector after payment of
duties and taxes;
1. For use as public and private bonded
warehouses; b. Payment of any claim arising from
any loss, destruction or damage
2. For use as sheds or yards; or sustained by the merchandise
received for storage;
3. For other special purposes.
c. Payment of warehousing fees at
CONDITION: When the business of the port requires the specified time;
such facilities.
d. Compliance with all requirements
NOTES. All such warehouses and premises shall be of law and in connection with
subject to the supervision of the Collector. bonded warehousing of goods;

The Collector shall impose conditions necessary for the e. Safekeeping and subsequent
protection of the revenue and the articles so stored delivery to the lawful claimant
upon order of the Collector, of
THE APPLICATION FOR THE ESTABLISHMENT - SEIZED goods stored therein;

1. must be in writing; f. Non-acceptance for storage of

any firearms or explosives and
2. filed with the Collector; other prohibited importations;

3. describing the premises, the location, and 2. Submission of Notarized Power of

capacity and the purpose for which the building Attorney designating the person
is to be used. authorized to sign or act in behalf of the
bonded warehouse and the customs
DUTIES OF THE COLLECTOR brokers authorized to transact with the
BOC;
1. shall cause an examination of the premises, with
reference particularly to its location, construction 3. Filing of a general BOND to guarantee
and means provided for the safekeeping of payment of duties and taxes in case raw
articles; and materials are not manufactured and
exported within the prescriptive period;
2. if found satisfactory, authorize its establishment;
and 4. Payment of at least 25% of warehousing
fees to the District Collector of Customs;
3. accept a bond for its operation and
maintenance. CLOSURE/ DISCONTINUANCE

DUTIES OF THE OPERATOR In case of a Public Bonded Warehouse, the Collector

may discontinue the use of OR close any warehouse at
The operator of the bonded warehouse shall pay an any time when conditions so warrant.
annual supervision fee in an amount to be fixed by the
Commissioner. In case of a Private Bonded Warehouse, upon receipt
of a written request to that effect from the operator
thereof, PROVIDED, all the requirements of the law and
regulations have been complied with by said operator.
Discontinuance of any warehouse shall be effective
upon official notice and approval thereof by the Collector
ENTRY OF ARTICLES FOR WAREHOUSING
The entry of articles for warehousing shall be in the
required number of copies in the prescribed form, and
shall be verified as in the entry of the articles for
consumption.
No warehousing entry shall be accepted for any article if
from the entry, supporting documents and/or information
such article is imported contrary to any law.
WAREHOUSING BOND
The Collector shall require from the importer an
irrevocable letter of credit, bank guarantee or bond
equivalent to the amount of such duties, taxes and
other charges:
1. After the articles have been examined; and
2. The duties, taxes charges have been
determined.
PURPOSE OF THE BOND:
• That the articles so stored shall be
withdrawn within one year from the
time of arrival at the port of entry; and
• For payment of any duties, taxes and
other charges to which the articles shall
be subject.
WITHDRAWAL OF ARTICLES FROM BONDED
WAREHOUSE
Articles entered under bond may be withdrawn at any
time for: (ConTra Ex U)
1. Consumption;
2. Transportation to another port;
3. Exportation; or
4. Delivery for Use on board a vessel or aircraft
engaged in foreign trade.
Notes: Number 4 pertains to the
airstores/seastores. Thus,
1. “Aircraft equipment and machinery,
spare parts, commissary and catering
supplies, aviation gas, fuel and oil,
whether crude or refined, and such
other articles or supplies imported by
and for the use of scheduled airlines
operating under Congressional
franchise MAYBE EXEMPTED FROM
PAYMENT OF DUTIES, TAXES AND
OTHER CHARGES;
2. Sea stores or aircraft stores adjudged
by the Collector to be excessive, when
the duties assessed by the Collector
thereon are not paid or secured
forthwith upon assessment of the same
SHALL BE SUBJECT TO
FORFEITURE.
Articles withdrawn for domestic consumption shall be
subject to payment of duties and taxes(CAO 1-2009).
PERIOD OF STORAGE IN BONDED WAREHOUSE
Maximum period of one year from the time of arrival at
the port of entry
Notes:
1. Articles not withdrawn at the expiration of the
prescribed period shall be sold at public auction
by the Collector;
2. Articles not withdrawn at the expiration of the
prescribed period shall be deemed
ABANDONED and IPSO FACTO FORFEITED
in favor of the government (CAO 1-2009).
CHARGES OF STORAGE IN BONDED WAREHOUSE.
The rates of storage shall be subject to arrangement
between the importer and the warehouse operator, but
such rates shall not be in excess of the customary
charges fixed by the Collector of the port for such
warehouses.
LIQUIDATION OF ENTRIES AND CANCELLATION OF
BONDS
Documentary requirements
a. Withdrawal permit;
b. Official permit evidencing payment of advance
deposit with the bank;
c. Official receipt showing final payment of duties
and taxes;
d. Central Bank Release Certificate.
The PPBWD or equivalent unit shall prepare the notice
of cancellation of warehousing bonds and forwards in to
LBD.
The LBD shall liquidate the entry within 5 days.
The Bonds Division shall cause the cancellation of the
corresponding bonds within 3 days.
MANUFACTURING BONDED
WAREHOUSE
Preliminaries
TYPES OF MANUFACTURING
BONDED WAREHOUSES
Customs Common Bonded Manufacturing
Warehouse (CCBMW)
Warehouse licensed by the BOC alone, & jointly with
GTIS for garment industry to import & store raw
materials and packaging materials for the account of its
accredited members.
EXEMPTION FROM PAYMENT OF DUTIES AND
TAXES
Any imported material used in the manufacture of such
articles, and any package, covering, brand and label
used in putting up the same may be conveyed without
the payment of duty into any bonded manufacturing
warehouse, and imported articles may be transferred
without the payment of duty from any bonded warehouse
into any bonded manufacturing warehouse, or to duly
accredited sub -contractors of manufacturers who shall
process the same into finished products for exports and
deliver such finished products back to the bonded
manufacturing warehouse, therefrom to be exported.
Articles manufactured by any bonded manufacturing
warehouse shall be exported exempted from payment of
duties and taxes. Imported materials and/or accessories
used in the manufacture of articles that are transferred to
other bonded manufacturing warehouse for processing
into finished products or for its own manufacture and
thereafter exported shall also be exempted from paying
any duties and taxes (CAO 2-91).
Imported raw materials, accessories, spare parts, labels,
hangers, cartons, packaging materials and the like used
in the manufacture of articles that are transferred to
other bonded manufacturing warehouses or licensed
members or subcontractor for processing into finished
products and thereafter exported SHALL BE EXEMPT
FROM PAYMENT OF ANY DUTIES AND TAXES (CAO
1-2009)
EXCEPTION FROM THE EXEMPTION
The privilege of exemption shall not apply to
Implements; Machineries; Spare parts and apparatuses;
Supplies; and tools to be used to construct, repair or
operate any bonded manufacturing warehouse UNLESS
the supplies and spare parts are INDISPENSABLY
needed in the production of finished products for exports
AND subject to presentation of a Certificate of
Qualification from BOI and Certificate of Exemption from
the DOF.
ESTABLISHMENT of CBMWs
DOCUMENTARY REQUIREMENTS (MaC P4R3OF3I2T)
1. List of Machineries and Equipment;
2. Clearance from offices to be secured by WDRD
w/in 10 working days from receipt of application. If
under FTI, also an indorsement by the FTI
Collector;
3. Plant location map
4. Plant layout plan;
5. Patterns or sketches;
6. Mayor’s occupancy Permit;
7. List of Raw materials to be imported;
8. Copy of Certificate of Registration with SEC
certified by the Corporate Secretary;
9. Certificate of Registration with the Bureau of
Domestic Trade of a sole proprietorship;
10. Instrument evidencing Ownership (if lease,
contract must have a minimum period of 1 year);
11. Audited or Interim Financial Statement;
12. Formula of manufacture certified by Industrial
Technology Development Institute. In case of
garments, by GTIS;
13. Project Feasibility study;
14. Proof of Investment;
15. Articles of Incorporation;
16. Applicant’s Income Tax Return for the last 2
years.
EVALUATION OF THE APPLICATION
The application to establish a CBW shall be evaluated
by the Evaluation Committee formed for this purpose OR
by the operating division concerned.
The following shall be considered in the evaluation:
1. Location of the proposed warehouse is
accessible to ALL means of land transportation;
2. The proposed warehouse has a strong structure
or configuration in order to prevent damage or
loss of goods stored thereat.
The windows and other openings shall be so
constructed to prevent removal of the stored
goods, which removal shall be done only
through the main entrance;
3. The capacity of the warehouse is consistent with
the expected volume of cargoes for storage;
4. Provision for working and storage areas
including compartments;
5. The raw materials are limited to those needed to
produce the export products;
6. The formula of manufacture/conversion shall
specify the usage of imported raw materials for
producing the finished products and in what
particular stage of production they will be
incurred. The formula to be certified by the ITDI;
7. The project feasibility study shall present the
viability of operation for a period of 5 years.
PRE-OPERATION REQUIREMENTS (BOBA 25)
1. Filing of performance BOND with the
District Collector of Customs in the
amount of P200,000.00;
2. Designation of Accountable Officer whose
position shall not be below the rank of
manager for open bonded warehouse;
3. Filing of a general BOND to guarantee
payment of duties and taxes in case raw
materials are not manufactured and
exported within the prescriptive period;
4. Submission of Notarized Power of
Attorney designating the person
authorized to sign or act in behalf of the
bonded warehouse and the customs
 brokers authorized to transact with the
BOC;
5. Payment of at least 50% of warehousing
fees to the District Collector of Customs.
SUBCONTRACTORS
Licensed Sub-contractor
A person or company licensed by the BOC, & the GTIS
in case of garments to perform activities in behalf of a
licensed CBW due to the latter’s insufficiency of
operational facilities (CAO 1-2009)
CONDITIONS FOR SUB-CONTRACTING
1. Due to insufficiency of operational facilities of
the principal;
2. Lack of material time to meet export
commitment;
3. subject to approval of the District Collector.
GUIDELINES FOR SUB-CONTRACTING
1. Only duly accredited sub-contractors may
undertake subcontracting jobs;
2. The stages to be subcontracted shall be
specified;
3. Only pre-cut or cut-to-pattern materials shall be
transferred;
4. Finished materials and wastages shall be
returned to the principal.
DOCUMENTARY REQUIREMENTS
1. Filing an application;
2. Same documents as in CBW;
3. Service agreement and/or Memorandum of
Understanding with the principal;
4. List of raw materials/semi-finished articles to be
subcontracted;
5. If garment manufacturer, accreditation shall be
with GTIS.
EVALUATION OF APPLICATION
Upon receipt of the application, the Collector shall refer it
to the WID for inspection. At the same time, the Collector
shall issue a memorandum to the WDRD to secure the
clearance within 5 days from receipt of the
memorandum.
The reports of the WID, WDRD and other documents
shall be submitted to the evaluation committee or to the
operating division concerned (CMO 39-91)
ACCREDITED MEMBERS OF CCBMW
Licensed Member
A natural or juridical person licensed by the BOC alone,
or jointly with the GTIS for garments industry, to be a
member of CCBW.
CONSIDERATIONS
1. An application for accreditation as member must
be submitted to the Collector together with
documentary requirements;
2. The applicant shall at anytime be accredited with
only one CCBMW;
3. The members shall maintain books of accounts
and other records of imported materials;
4. The principal shall be directly responsible for the
liquidation of all raw materials imported by the
members;
5. The members shall insure the imported goods;
6. Non-exportation or non-importation for at least
one year shall render the license cancelled;
EVALUATION OF APPLICATION
Upon receipt of the application, the Collector shall refer it
to the WID for inspection. At the same time, the Collector
shall issue a memorandum to the WDRD to secure the
clearance within 5 days from receipt of the
memorandum.
The reports of the WID, WDRD and other documents
shall be submitted to the evaluation committee or to the
operating division concerned (CMO 39-91)
TRANSFER OF MEMBERSHIP TO ANOTHER CCBMW
The transfer of membership from one CCBMW to
another shall not be used as a means to circumvent the
requirement to manufacture and re-export the finished
products within 1 year extendible for another 3 months
from the date of original transfer to CCBMW.
In case of garment manufacturer transfers should be
approved by the GTIS.
DOCUMENTARY REQUIREMENTS FOR TRANSFER
1. Letter of intent to transfer
2. Sworn statement by the member that it has no
outstanding obligation with its former CCBMW;
3. Written approval by the former CCBMW to the
transfer or reason for objecting within 10 working
days from receipt of letter of intent;
Note: Non-compliance with this requirement
shall render the processing of import documents
to be held in abeyance until the comment is
submitted.
4. Acceptance letter of the new CCBMW of
assumption of all liabilities of the member.
OVERTIME WORK
Overtime pay shall be charged to the account of the
CBW Operator who shall remit it to the Collector.
OPERATION of CBMWs
APPLICABLE IMPORT ENTRY
The importation of CBW shall be cleared using a formal
warehousing entry (Single Administrative
Document).
BOND
The bond covering the importation shall be equivalent to
the declared duties and taxes.
EXAMINATION OF IMPORTED MATERIALS
General rule:
All examination of materials imported by CBWs shall be
conducted only inside customs zone. Transfer shall be
made only after customs requirements and examinations
are completed.
Exception:
Examinations may be made in the premises of the CBW
if it is a holder of certificate of accreditation under the
EPRS (Express Processing in the Release of Shipment).
NOTES.
1. Discrepancies found in the
examination and appraisal shall be
subject to payment of duties and taxes
plus surcharge;
2. In case, there shall be an adjustment
of duties and taxes plus surcharge OR
seizure, if warranted;
3. In case of misclassification and
misdeclaration, surcharge shall be
immediately collected. However, if the
misdeclared articles found are not
included in the approved list of
importables, the same shall be seized.
TRANSFER OF CARGOES
The wharfinger shall prepare the transfer of the cargoes
to the CBW by accomplishing the boatnote
The warehouseman shall receive the cargoes to be
stored in the warehouse. Where the CBW is an open
bobded warehouse, receipt shall be made by the
account officer at the pier or warehouse.
WITHDRAWAL OF ARTICLES FROM CBW
Articles received into such bonded manufacturing
warehouse or articles manufactured therein may be
withdrawn or removed therefrom for direct shipment
and for immediate exportation in bond under the
supervision of the proper customs officer.
DUTIES OF THE PROPER CUSTOMS OFFICER
1. Certify to such shipment and exportation, or
lading for immediate exportation as the case
may be;
2. Describe the articles by their mark or otherwise,
the quantity, the date of exportation, in the name
of the vessel of aircraft.
WITHDRAWAL OF ARTICLES UNDER CMO 39-1991
1. For production for export;
The raw materials that were first
transferred to, and stored in, the bonded
warehouse, shall first be withdrawn for
production adhering to the FIFO system
(first-in-first-out).
2. For sub-contracting;
An inventory and identification shall be
conducted by the warehouseman;
Transfers to sub-contractors and return of
finished products shall be covered by a
boatnote and need not be underguarded;
All materials, including wastages, shall be
returned to the operator;
3. For sale of finished products to other Bonded
Manufacturing Warehouse or to PEZA-
registered enterprise;
The customs examiner shall examine the
finished products before transfer as in
ordinary exportation and shall issue a
Certificate of Identification;
The buyer shall file an import entry
together with the sales contract, boatnote
and packing list covering the finished
products to be transferred within 5 days
after such transfer;
4. For transfer or sale of semi-finished or finished
products between accredited members
belonging to the same common bonded
warehouse.
The transfer shall not be used to extend
the ORIGINAL period of production and
exportation counted from the date the
imported materials were received by the
operator;
Only semi-finished or finished products
which had undergone processing or
manufacturer by one member may be
transferred /sold without the payment of
duty to another member belonging to the
same CCBMW;
The transferee or buyer member shall
further process the articles or use them as
inputs, holders, coverings or containers of
its own semi-finished or finished products
for subsequent exportation;
Subsequent transfer or sale by the first
transferee or buyer member to another
member is not allowed;
The CCBMW and the transferee or buyer
member shall be jointly responsible for the
liquidation of the warehousing entries.
DISPOSITION OF WASTAGES, REJECTS AND BY-
PRODUCTS
The waste and by-products incident to the process of
manufacture in bonded warehouses may be withdrawn
for domestic consumption upon payment of duty equal
to the duty which would be assessed and collected
pursuant to law as if such waste or by -products were
imported from a foreign country.
All waste materials may be disposed under government
supervision. All labor performed and services rendered
under these provisions shall be under the supervision of
officer and at the expense of the manufacturer.
MODES OF DISPOSING WASTAGES AND BY-
PRODUCTS
1. Payment of duties and taxes
Wastages and by-products may be
withdrawn for domestic consumption upon
payment of duties equal to the duty;
The operator shall apply in writing to the
Collector for payment of duties and taxes
of wastages, rejects and by-product
incurred in the production specifying the
following:
a. Import Entry Number covering
waste materials/ by products;
b. Description of waste materials/by-
products;
c. Quantity;
d. Percentage against the total
imported raw materials covered by
the entry;
e. Certification by the Customs
Bonded Warehouseman/Operator
to the occurrence of the said
wastages, rejects and by-
products;
f. Customs Examiner (WAD) shall
examine the wastages, rejects or
by-products and if found to have
commercial value shall
recommend payment of duties
and taxes otherwise shall
condemned;
g. Once application for payment is
approved by the Collector, the
Central Bank Release Certificate
should be submitted to the
operating division concerned if
necessary. Withdrawal permit
covering the wastages/by-
products shall be filled with the
operation division concerned or
equivalent unit;
h. The operator may opt to pay in
advance the duties and taxes on
wastages, rejects and by-products
in the course of manufacture on
the basis of the percentage of
wastages determined and
approved in the formula of
manufacture.
2. By Re-Exportation
The Operator shall apply in writing to the
Collector of Customs for re-exportation giving
the same information and following the
procedure above;
3. By- Condemnation
The operator shall apply in writing with the
Collector of Customs a request for the
disposition of wastages together with the
certification of the CBW Operator/
Warehouseman as to the occurrence of said
wastages, specifying the following:
1. Import Entry Number covering waste
materials, rejects and by-products;
2. Description of waste materials/by-
products;
3. Quantity; and
4. Balance against the total imported raw
material covered by the import entry.
The Condemnation Committee determines and
verifies the following:
a. the quantity and whether wastages have any
commercial value;
b. the amount of wastages is within the verified
formula of manufacture (CMO 39-1991).
LIQUIDATION OF MATERIALS, ENTRIES AND
CANCELLATION OF BONDS
Documentary requirements to liquidate warehousing
entries
a. Original warehousing entry;
b. Warehousing permit;
c. BL/AWB;
d. Packing list/Commercial invoice;
e. Transshipment permit;
f. Boatnote
The Account Officer shall file a request for retrieval of
the original working copy of warehousing entry from the
WDRD. After which, he shall compute, review and
liquidate application for liquidation of raw materials within
15 days from receipt of application.
In case of partial liquidation, the statement shall be
forwarded to the Bonds Division which shall act on the
request within 3 days upon receipt thereof.
In case of full/final liquidation, the statement of
liquidation shall be forwarded to the Liquidation and
Billing Division (LBD). The LBD shall liquidate the entry
within 5 days.
The Bonds Division shall cause the cancellation o the
bonds within 3 days.
 MULTINATIONAL
REGIONAL BONDED
WAREHOUSE (MRBW)
DEFINITION
A warehouse facility licensed by BOI in proper cases to
serve as a supply depot for the storage, deposit,
safekeeping of spare parts, components, semi-finished
products and raw materials including the packing,
covering, putting up, marking, labeling, cutting or altering
to customer’s satisfaction, mounting and/or packaging
into kits or marketable lots thereof to fill up transactions
and sales made by its officer or parent companies and to
serving as a storage of goods purchased locally by the
home office of the multinational for export abroad under
the supervision of the BOC (CAO 1-2009).
NOTE: HERE, THE REVIEWEE HAS TO SEE
THE DIFFERENCE BETWEEN AN RHQ
(Regional or Area Headquarters) FROM
ROHQ (Regional Operating Headquarters).
BOOK IV CONTAINS MANY DISCUSSIONS
ON THE IMPORTATIONS OF
MULTINATIONAL COMPANIES.
REPUBLIC ACT NO. 8756
AN ACT PROVIDING FOR THE TERMS, CONDITIONS
AND LICENSING REQUIREMENTS OF REGIONAL
OR AREA HEADQUARTERS, REGIONAL
OPERATING HEADQUARTERS, AND REGIONAL
WAREHOUSES OF MULTINATIONAL COMPANIES,
AMENDING FOR THE PURPOSE CERTAIN
PROVISIONS OF EXECUTIVE ORDER NO. 226,
OTHERWISE KNOWN AS THE OMNIBUS
INVESTMENTS CODE OF 1987
Section 1. The title of Book III of Executive Order No.
226, otherwise known as the Omnibus Investments
Code of 1987, is hereby amended as follows:
"BOOK III
"INCENTIVES TO MULTINATIONAL COMPANIES
ESTABLISHING REGIONAL OR AREA
HEADQUARTERS AND REGIONAL OPERATING
HEADQUARTERS IN THE PHILIPPINES"
Section 2. Definition of Terms. - For purposes of this
Act, the term:
(1) Multinational Company shall mean a foreign
company or a group of foreign companies with business
establishments in two or more countries;
(2) Regional or Area Headquarters (RHQ) shall mean an
office whose purpose is to act as an administrative
branch of a multinational company engaged in
international trade which principally serves as a
supervision, communications and coordination center for
its subsidiaries, branches or affiliates in the Asia-Pacific
Region and other foreign markets and which does not
earn or derive income in the Philippines; and
(3) Regional Operating Headquarters (ROHQ) shall
mean a foreign business entity which is allowed to derive
income in the Philippines by performing qualifying
services to its affiliates, subsidiaries or branches in the
Philippines, in the Asia-Pacific Region and in other
foreign markets.
Section 3. The Title and Article 58 of Chapter I of the
same Code are hereby amended as follows:
"CHAPTER I
LICENSING OF REGIONAL OR AREA
HEADQUARTERS
Art. 58. Qualification of Regional or Area Headquarters. -
Any foreign business entity formed, organized and
existing under any laws other than those of the
Philippines whose purpose, as expressed in its
organizational documents or by resolution of its Board of
Directors or its equivalent, is to supervise, superintend,
inspect or coordinate its own affiliates, subsidiaries or
branches in the Asia-Pacific Region and other foreign
markets may establish a regional or area headquarters
in the Philippines, by securing a license therefor from the
Securities and Exchange Commission, upon the
favorable recommendation of the Board of Investments.
The Securities and Exchange Commission shall, within
thirty (30) days from the effectivity of this Code, issue the
implementing rules and regulations. The following
minimum requirements shall, however, be complied with
by the said foreign entity:
(a) A certification from the Philippine
Consulate/Embassy, or a duly authenticated certification
from the Department of Trade and Industry or its
equivalent in the foreign firm's home country that said
foreign firm is an entity engaged in international trade
with affiliates, subsidiaries or branch offices in the Asia-
Pacific Region and other foreign markets.
(b) A duly authenticated certification from the principal
officer of the foreign entity to the effect that the said
foreign entity has been authorized by its Board of
Directors or governing body to establish its regional or
area headquarters in the Philippines, specifying that:
(1) The activities of the regional or area headquarters
shall be limited to acting as a supervisory,
communications and coordinating center for its
subsidiaries, affiliates and branches in the region;
(2) The regional or area headquarters will not derive any
income from sources within the Philippines and will not
participate in any manner in the management of any
subsidiary or branch office it might have in the
Philippines nor shall it solicit or market goods and
services whether on behalf of its mother company or its
branches, affiliates, subsidiaries or any other company;
and
(3) The regional or area headquarters shall notify the
Board of Investments and the Securities and Exchange
Commission of any decision to close down or suspend
operations of its headquarters at least fifteen (15) days
before the same is effected.
(c) An undertaking that the multinational company will
remit into the country such amount as may be necessary
to cover its operations in the Philippines but which
amount will not be less than Fifty thousand United States
dollars ($50,000) or its equivalent in other foreign
currencies annually. Within thirty (30) days from receipt
of certificate of registration from the Securities and
Exchange Commission, the multinational company will
submit to the Securities and Exchange Commission a
certificate of inward remittance from a local bank
showing that it has remitted to the Philippines the
amount of at least Fifty thousand United States dollars
($50,000) or its equivalent in other foreign currencies
and converted the same to Philippine currency.
Annually, within thirty (30) days from the anniversary
date of the multinational company's registration as a
regional or area headquarters with the Securities and
Exchange Commission, it will submit proof to the
Securities and Exchange Commission of inward
remittance amounting to at least Fifty thousand United
States dollars ($50,000) or its equivalent in other foreign
currencies during the past year.
(d) Any violation by the regional or area headquarters of
a multinational company of any of the provisions of this
Code, or its implementing rules and regulations, or other
terms and conditions of its registration, or any provision
of existing laws, shall constitute a sufficient cause for the
cancellation of its license or registration.
Section 4. Book III of the same Code is hereby further
amended by adding a new chapter designated as
Chapter II to read as follows:
"CHAPTER II
"LICENSING OF REGIONAL OPERATING
HEADQUARTERS
"Art. 59. Qualification of Regional Operating
Headquarters (ROHQs). - Any foreign business entity
formed, organized and existing under any laws other
than those of the Philippines may establish a regional
operating headquarters in the Philippines to service its
own affiliates, subsidiaries or branches in the
Philippines, in the Asia-Pacific Region and other foreign
markets. ROHQs will be allowed to derive income by
performing the qualifying services enumerated under
paragraph (b) 1 hereunder. ROHQs of non-banking and
non-financial institutions are required to secure a license
from the Securities and Exchange Commission, upon
the favorable recommendation of the Board of
Investments. ROHQs of banking and financial
institutions, on the other hand, are required to secure
licenses from the Securities and Exchange Commission
and the Bangko Sentral ng Pilipinas, upon the favorable
recommendation of the Board of Investments.
"The Securities and Exchange Commission and the
Bangko Sentral ng Pilipinas shall, within thirty (30) days
from the effectivity of this Code, issue the implementing
rules and regulations.
"The following minimum requirements shall be complied
with by the said foreign entity:
"(a) A certification from the Philippine
Consulate/Embassy, or a duly authenticated certification
from the Department of Trade and Industry or its
equivalent in the foreign firm's home country that said
foreign firm is an entity engaged in international trade
with affiliates, subsidiaries or branch offices in the Asia-
Pacific Region and other foreign markets.
"(b) A duly authenticated certification from the principal
officer of the foreign entity to the effect that the said
foreign entity has been authorized by its Board of
Directors or governing body to establish its regional
operating headquarters in the Philippines, specifying
that:
"(1) The regional operating headquarters may engage in
any of the following qualifying services:
- General administration and planning;
- Business planning and coordination;
- Sourcing/procurement of raw materials and
components;
- Corporate finance advisory services;
- Marketing control and sales promotion;
- Training and personnel management;
- Logistics services;
- Research and development services, and product
development;
- Technical support and maintenance;
- Data processing and communication; and
- Business development.
"ROHQs are prohibited from offering qualifying
services to entities other than their affiliates,
branches or subsidiaries, as declared in their
registration with the Securities and Exchange
Commission nor shall they be allowed to directly
and indirectly solicit or market goods and services
whether on behalf of their mother company,
branches, affiliates, subsidiaries or any other
company.
"(2) The regional operating headquarters shall notify the
Board of Investments, the Securities and Exchange
Commission and the Bangko Sentral ng Pilipinas, as the
case may be, of any decision to close down or suspend
operations of its headquarters at least fifteen (15) days
before the same is effected.
"(c) An undertaking that the multinational company will
initially remit into the country such amount as may be
necessary to cover its operations in the Philippines but
which amount will not be less than Two hundred
thousand United States dollars ($200,000) or its
equivalent in other foreign currencies.
"Within thirty (30) days from receipt of certificate of
registration, the multinational company will submit to the
Securities and Exchange Commission a certificate of
inward remittance from a local bank showing that it has
remitted to the Philippines the amount of at least Two
hundred thousand United States dollars ($200,000) or its
equivalent in other foreign currencies and converted the
same to Philippine currency.
"(d) Any violation by the regional operating headquarters
of a multinational company of the provisions of this
Code, or its implementing rules and regulations, or other
terms and conditions of its registration, or any provision
of existing laws, shall constitute a sufficient cause for the
cancellation of its license or registration."
Section 5. Chapter II of the same Code is hereby
amended and designated as Chapter III. Articles 59, 60,
61 and 62 under the same Chapter are hereby amended
as follows:
"CHAPTER III
"INCENTIVES TO EXPATRIATES
"Art. 60. Multiple Entry Visa. - Foreign personnel of
regional or area headquarters and regional operating
headquarters of multinational companies, their
respective spouses and unmarried children under
twenty-one (21) years of age, if accompanying them or if
following to join them after their admission into the
Philippines as non-immigrant shall be issued a multiple
entry special visa within seventy-two hours upon
submission of all required documents, and which shall
be valid for a period of three (3) years to enter the
Philippines: Provided, That a responsible officer of the
applicant company submits a duly authenticated
certificate to the effect that the person who seeks entry
into the Philippines is an executive of the applicant
company and will work exclusively for applicant's
regional or area headquarters or regional operating
headquarters which is duly licensed to operate in the
Philippines, and that he will receive a salary and will be
paid by the headquarters in the Philippines an amount
equivalent to at least Twelve thousand United States
dollars ($12,000), or the equivalent in other foreign
currencies per annum.
"The admission and stay shall be coterminous with the
validity of the multiple entry special visa. The stay,
however, is extendible for three years upon submission
to the Bureau of Immigration of a sworn certification by a
responsible officer of the regional or area headquarters
or regional operating headquarters: that its license to
operate remains valid and subsisting and that the
regional or area headquarters or regional operating
headquarters has withheld tax due on compensation and
the same has been paid to the Bureau of Internal
Revenue.
"Non-immigrants who have been admitted under the
multiple entry special visa, as well as their respective
spouses and dependents, shall be exempt from: the
payment of all fees due under the immigration and alien
registration laws; securing alien certificates of
registration; and obtaining emigration clearance
certificates, and all types of clearances required by any
government department or agency, except that upon
final departure from the Philippines the employer of the
said nonimmigrants shall so advise in writing the Bureau
of Immigration at least five (5) working days prior to the
non-immigrant's departure, and the finally departing non-
immigrant employee shall be required to submit to the
said office a tax clearance from the Bureau of Internal
Revenue.
"Art. 61. Withholding Tax of 15% on Compensation
Income. - Aliens employed by the regional or area
headquarters and regional operating headquarters of
multinational companies shall be subject for each
taxable year upon their gross income received as
salaries, wages, annuities, compensations, remuneration
and emoluments to a tax equal to fifteen per centum
(15%) of such gross income. The same tax treatment is
applicable to Filipinos employed and occupying the
same positions as those aliens employed by
multinational companies: Provided, That said Filipinos
shall have the option to be taxed at either 15% of gross
income or at the regular tax rate on their taxable income
in accordance with the National Internal Revenue Code,
as amended by Republic Act No. 8424.
"Art. 62. Tax and Duty Free Importation. - An alien
executive of the regional or area headquarters and
regional operating headquarters of a multinational
company shall enjoy tax and duty free importation of
personal and household effects as provided for
under Section 105(h) of the Tariff and Customs
Code, as amended, and Section 109(I) of the National
Internal Revenue Code, as amended: Provided, That
the personal and household effects shall arrive in
the Philippines within ninety (90) days before or after
conversion of the alien executive's admission
category to multiple entry visa issued under this Act.
"Art. 63. Travel Tax Exemption. - Personnel of regional
or area headquarters and regional operating
headquarters of multinational companies and the
dependents of such foreign personnel if joining them
during the period of their assignment in the Philippines,
as certified by the Board of Investments, shall be
exempted from the payment of travel tax imposed under
Section 1 of Presidential Decree No. 1183, as
amended."
Section 6. Chapter III of the same Code is hereby
amended and designated as Chapter IV. Articles 63, 64,
65, 66 and 67 are hereby amended to read as follows:
"CHAPTER IV
"INCENTIVES TO REGIONAL OR AREA
HEADQUARTERS AND REGIONAL OPERATING
HEADQUARTERS
"Art. 64. Corporate Income Tax Incentive to Regional or
Area Headquarters and Regional Operating
Headquarters. - Regional or area headquarters
established in the Philippines by multinational
companies and which headquarters do not earn or
derive income from the Philippines and which act as
supervisory, communications and coordinating centers
for their affiliates, subsidiaries, or branches in the Asia-
Pacific Region and other foreign markets shall not be
subject to income tax. Regional operating headquarters
shall be subject to a tax rate of ten percent (10%) of their
taxable income as provided for under the National
Internal Revenue Code, as amended by Republic Act
No. 8424: Provided, That any income derived from
Philippine sources by the ROHQ when remitted to the
parent company shall be subject to the tax on branch
profit remittances as provided for in Section 28(a)(5) of
the National Internal Revenue Code.
"Art. 65. Value-Added Tax. - The regional or area
headquarters established in the Philippines by
multinational companies shall be exempted from the
value-added tax. In addition, the sale or lease of goods
and property and the rendition of services to regional or
area headquarters shall be subject to zero percent (0%)
VAT rate as provided for in the National Internal
Revenue Code, as amended.
"Regional operating headquarters shall be subject to the
ten percent (10%) value-added tax as provided for under
the National Internal Revenue Code, as amended.
"Art. 66. Exemption From All Kinds of Local Taxes, Fees,
or Charges. - The regional or area headquarters and
regional operating headquarters of multinational
companies shall be exempt from all kinds of local taxes,
fees, or charges imposed by a local government unit
except real property tax on land improvements and
equipment.
"Art. 67. Tax and Duty Free Importation of Training
Materials and Equipment; Importation of Motor
Vehicles. - Regional or area headquarters and
regional operating headquarters shall enjoy tax and
duty free importation of equipment and materials for
training and conferences which are needed and
used solely for their functions as regional or area
headquarters or regional operating headquarters
and which are not locally available subject to the
prior approval of the Board of Investments.
"The sale or disposition of equipment within two (2)
years after importation, entered tax and duty free,
shall require prior approval of the Board of
Investments and prior payment of applicable taxes
and duties waived in favor of RHQ/ROHQ.
"Regional or area headquarters and regional
operating headquarters shall be entitled to the
importation of new motor vehicles subject to the
payment of the corresponding taxes and duties.
"BOOK IV
"INCENTIVES TO MULTINATIONAL COMPANIES
ESTABLISHING REGIONAL WAREHOUSES TO
SUPPLY SPARE PARTS, COMPONENTS, SEMI-
FINISHED PRODUCTS AND RAW MATERIALS TO
THE ASIA-PACIFIC REGION AND OTHER FOREIGN
MARKETS"
Section 7. Articles 68, 69, 70, 71 and 72 of the same
Code are hereby amended to read as follows:
"Art. 68. Qualifications. - A multinational company
organized and existing under any laws other than
those of the Philippines which is engaged in
international trade and supplies spare parts,
components, semi-finished products and raw
materials to its distributors or markets in the Asia-
Pacific area and other foreign areas and which has
established or will simultaneously establish a
regional or area headquarters and/or regional
operating headquarters in the Philippines in
accordance with the provisions of Book III of this
Code and the rules and regulations implementing
the same may also establish a regional warehouse
or warehouses in ecozones in the Philippines, after
securing a license therefor from the Philippine
Economic Zone Authority (PEZA). With respect to
regional warehouses located or will locate in
ecozones with special charters, such license shall
be secured from the concerned ecozone authorities.
For existing regional warehouses, said license shall
be secured from the Board of Investments unless
they choose to relocate inside ecozones: Provided,
That:
"(1) The activities of the regional warehouse shall be
limited to serving as a supply depot for the storage,
deposit, safekeeping of its spare parts, components,
semi-finished products and raw materials including the
packing, covering, putting up, marking, labelling and
cutting or altering to customer's specification, mounting
and/or packaging into kits or marketable lots thereof, to
fill up transactions and sales made by its head offices or
parent companies and to serving as a storage or
warehouse of goods purchased locally by the home
office of the multinational for export abroad.
The regional warehouse shall not directly engage in
trade nor directly solicit business, promote any sale, nor
enter into any contract for the sale or disposition of
goods in the Philippines:
ACL INSERTION: NOTE THAT HERE, THERE ARE
SEVERAL “PROVIDEDS”.
Provided, That a regional warehouse may be allowed to
withdraw imported goods from said warehouse/s for
delivery to an authorized distributor in the Philippines:
Provided, however, That the corresponding taxes,
customs duties and charges under the Tariff and
Customs Code have been paid by the headquarters of
the said multinational upon arrival of such goods:
Provided, further, That the delivery of said goods to the
aforesaid distributor in the Philippines shall be treated as
a sale made by the headquarters rather than that of its
head office, and shall be reflected in a separate book of
accounts, any representation as to who is the seller to
the contrary notwithstanding:
Provided, furthermore, That the aforementioned sale
shall be governed by the provisions on value-added tax
in accordance with the National Internal Revenue Code,
as amended by Republic Act No. 8424:
Provided, finally, That the income from the
aforementioned sale to said distributor shall be treated
as income derived by the said headquarters from
sources within the Philippines and shall be subject to the
corporate income tax of a resident foreign corporation
under the National Internal Revenue Code, as amended,
the provision of any law to the contrary notwithstanding.
"(2) The personnel of a regional warehouse will not
participate in any manner in the management of any
subsidiary, affiliate or branch office it might have in the
Philippines other than the activities allowed under this
Act.
"(3) The personnel of the regional or area headquarters
or regional operating headquarters shall be responsible
for the operation of the regional warehouse subject to
the provisions of this Code.
"(4) The multinational company shall pay the Board
of Investments, the PEZA or concerned ecozone
authorities, as the case may be, and the appropriate
Collector of Customs concerned the corresponding
license fees and storage fees to be determined by
said offices.
"(5) An application for the establishment of a
regional warehouse located outside an ecozone
shall be made in writing to the Board of Investments,
to the PEZA, or to concerned ecozone authorities in
the case of regional warehouses located in
ecozones. The application shall describe the
premises, the location and capacity of the regional
warehouse and the purpose for which the building is
to be used.
"The jurisdiction and responsibility of supervising
the regional warehouses located outside ecozones
shall be vested on the Bureau of Customs, and the
Board of Investments, or the PEZA or concerned
ecozone authorities for warehouses within
ecozones.
"The Board of Investments, the PEZA or concerned
ecozone authorities, in consultation with the
Regional Director of Customs of the district
(INSERTION: This refers to District Collector of
Customs) where the warehouse will be situated shall
cause an examination of the premises to be made
and if found satisfactory, it may authorize its
establishment without complying with the
requirements of any other government body, subject
to the following conditions:
"(1) That the articles to be stored in the warehouse are
spare parts, components, semi-finished products and
raw materials of the multinational company operator for
distribution and supply to its Asia-Pacific and other
foreign markets including packaging, coverings, brands,
labels and warehouse equipment as provided in Article
69(a) hereof;
"(2) That the entry or importation, storage or re-export of
the goods destined for or to be stored in the regional
warehouse will not involve any dollar outlay from
Philippine sources;
"(3) That they are of such character as to be readily
identifiable for re-export; and in case of local distribution
they shall be subject to Article 68(1), Article 69
paragraph (b) and the guidelines implementing Book IV
of this Code;
"(4) That it shall file an ordinary warehousing bond in an
amount equal to one hundred percent (100%) of the
ascertained customs duties on the articles imported
without prejudice to its filing a general warehousing bond
in lieu of the ordinary warehousing bond;
"(5) The percentage of annual allowable withdrawal from
warehouses located outside ecozones for domestic use
shall be subject to the approval of the Board of
Investments, or of the PEZA or concerned ecozone
authorities with respect to warehouses located within the
ecozones of their jurisdiction: Provided, however, That in
the case of existing warehouses, in no case shall their
withdrawals exceed thirty percent (30%) of the value of
goods they have brought in for any given year and the
payment of the corresponding taxes and duties shall
have been made upon the arrival of such goods
imported: Provided, further, That the PEZA or concerned
ecozone authorities may allow withdrawal exceeding
thirty percent (30%) of the value of goods under such
terms and conditions the PEZA or concerned ecozone
authorities may impose.
"Art. 69. Tax Treatment of Imported Articles in the
Regional Warehouse. -
"(a) Tax Incentives for Qualified Goods Destined for
Reexportation to the Asia-Pacific and Other Foreign
Markets. - Except as otherwise provided in this Code,
imported spare parts, components, semi-finished
products, raw materials and other items including any
packages, coverings, brands and labels and warehouse
equipment as may be allowed by the Board of
Investments, the PEZA or concerned ecozone
authorities, as the case may be, for use exclusively on
the goods stored, except those prohibited by law,
brought into the regional warehouse from abroad to be
kept, stored and/or deposited or used therein and re-
exported directly therefrom under the supervision of the
Collector of Customs concerned for distribution to its
Asia-Pacific and other foreign markets in accordance
with the guidelines implementing Book IV of this Code
including to a bonded manufacturing warehouse in the
Philippines and eventually re-exported shall not be
subject to customs duty, internal revenue tax, export tax
nor to local taxes, the provisions of law to the contrary
notwithstanding.
"(b) Payment of Applicable Duties and Taxes on
Qualified Goods Subject to Laws and Regulations
Covering Imported Merchandise if Destined for the
Local Market. –
Any spare parts, components, semi-finished
products, raw materials and other items sent,
delivered, released or taken from the regional
warehouse to the local market in accordance with
the guidelines implementing Book IV of this Code
shall be subject to the payment of income taxes,
customs duties, taxes and other charges provided
for under Section 68 hereof and for which purpose,
the proper commercial invoice of the head offices or
parent companies shall be submitted to the
Collector of Customs concerned; and shall be
subject to laws and regulations governing imported
merchandise:
Provided, That in case any of the foregoing items are
sold, bartered, hired or used for purposes other than
they were intended for without prior compliance with
the guidelines implementing Book IV of this Code
and without prior payment of the duty, tax or other
charges which would have been due and payable at
the time of entry if the articles had been entered
without the benefit of this Order, shall be subject to
forfeiture and the importation shall constitute a
fraudulent practice against customs revenue
punishable under Section 3602, as amended, of the
Tariff and Customs Code of the Philippines:
Provided, further, That a sale pursuant to a judicial
order shall not be subject to the preceding proviso
without prejudice to the payment of duties, taxes
and other charges.
"Art. 70. Exemption From the Maximum Storage
Period Under the Tariff and Customs Code; Period of
Storage in the Regional Warehouse. –
The provision of the law in Section 1908 of the Tariff
and Customs Code of the Philippines, as amended,
to the contrary notwithstanding, articles duly
entered for warehousing may remain in the regional
warehouses for a period of two (2) years from the
time of their transfer to the regional warehouse,
which period may be extended with the approval of
the Board of Investments for an additional period of
one (1) year upon payment of the corresponding
storage fee on the unexported articles, as provided
for under Article 68(4) for each extension until they
are re-exported in accordance with the guidelines
implementing Book IV of this Code. Any articles
withdrawn, released or removed contrary to the
provisions of said guidelines shall be forfeited
pursuant to the provisions of Article 69, paragraph
(b) hereof.
"Art. 71. Rules and Regulations on the Jurisdiction,
Operation and Control Over Qualified Goods in the
Regional Warehouse. –
The Board of Investments, the PEZA, concerned
ecozone authorities and the Bureau of Customs
shall jointly issue special rules and regulations on
the receiving, handling, custody, entry, examination,
classifications, delivery, storage, warehousing,
manipulation and packaging, release for
reexportation or for importation and delivery to a
Philippine distributor and for the safekeeping,
recording, inventory and liquidation of said qualified
goods, any existing law notwithstanding. Such rules
and regulations shall be formulated in consultation
with the applicants/operators of regional
warehouses.
"Art. 72. Cancellation of License or Registration. - Any
willful violation by the regional or area headquarters or
regional operating headquarters of a multinational
company which has established a regional warehouse or
warehouses contrary to or in violation of the provisions
of existing laws and the implementing guidelines of Book
IV of this Code shall constitute a sufficient cause for the
cancellation of its license or registration in addition to the
penalties hereinabove provided in Article 69, paragraph
(b) hereof.
"The Board, the PEZA or concerned ecozone
authorities, as the case may be, shall have the
authority to impose such fines in amounts that are
just and reasonable in cases of late submission or
non-compliance on the part of registered
enterprises, with reporting and other requirements
under this Code and its implementing rules and
regulations."
Section 8. Article 73 of the same Code is hereby
repealed.
Section 9. A new article is hereby inserted to read as
follows:
"Art. 73. Implementing Rules and Regulations. - To
implement the provisions of Books III and IV of this
Code, the Department of Trade and Industry, in
coordination with the Department of Foreign Affairs, the
Board of Investments, the Philippine Economic Zone
Authority, the ecozone authorities with special charters,
the Securities and Exchange Commission, the Bureau of
Internal Revenue, the Bureau of Customs, Bangko
Sentral ng Pilipinas, Philippine Tourism Authority, and
the Bureau of Immigration shall jointly promulgate such
rules and regulations which shall take effect thirty (30)
days after their publication in at least two (2) national
newspapers of general circulation in the Philippines."
Section 10. Separability Clause. - If any part or section
of this Act is declared unconstitutional for any reason or
whatsoever, such parts not so declared shall remain in
full force and effect.
Section 11. Repealing Clause. - All laws, decrees,
orders, rules and regulations or issuances or parts
thereof inconsistent with the provisions of this Act are
hereby repealed or modified accordingly.
Section 12. Effectivity Clause. - This Act shall take
effect after thirty (30) days following its full publication in
at least two (2) newspapers of general circulation in the
Philippines.
APPLICABLE TERMINOLOGIES
PERSONS INVOLVED IN
WAREHOUSING
1. Account Officer
Customs personnel responsible for monitoring the
performance of CBW from importation to liquidation of its
imported raw materials.
2. Accountable Officer
responsible official of the CBW named and designated
by the operator as the person other than himself, liable
to the BOC for all operational aspects of the warehouse.
3. Customs Bonded Warehouse Operator
Natural or juridical person who has a duly approved
license to operate a CBW issued by the BOC.
4. Exporter
Natural or juridical person accredited by Bureau of
Export Trade Promotion (BEPT) of the DTI, or the Export
Development Council (EDC)
5. Information Validator Service Provider (IVSP)
Service provider accredited by the BOC under CAO 7-
2008 tasked to organize information for purposes of
accreditation as an importer and/or broker.
6. Licensed client/end-user
Natural or juridical person licensed by the BOC to be a
client/end-user of ICBW.
OFFICES INVOLVED IN
WAREHOUSING
1. Bonded Warehousing Committee (BWC)
Committee created to act on applications for the
establishment and operation of CBW, renewal of
licenses to operate CBW & other related matters
2. Garments and Textiles Import Services
(GTIS)
Government agency attached to the DTI mandated to
assist the BOC in granting license to be an operator or
be a member or subcontractor of a warehouse facility
involved in the manufacture of garments or textiles for
exports.
3. Operating Warehouse Division/Unit
Division/unit in each port responsible for the supervision
and control of operation of CBWs.

4. Warehouse Coordinating Division (WCD)
Office created under E.O. 127 mandated to coordinate &
evaluate warehousing activities including the liquidation
of materials to prevent possible violations of customs
laws, rules & regulations.
5. Warehouse Monitoring and Audit Unit.
An office under the Office of the Commissioner of
Customs headed by a Special Assistant to the
Commissioner of Customs for Warehousing and
Operations.
The WMAU shall establish and maintain a
comprehensive database of information such as 201
files pf CBW operators, its accredited members,
subcontractors and clientele/end users, list of materials
allowed for manufacturing, historical data of
importations.
The WMAU is authorized to coordinate with the
respective ECOZONE and FREEPORT authorities to
verify transfers of raw materials to PEZA-registered
enterprises and/or Freeport locators and for the possible
conduct of joint audits on raw materials transferred.
The WAMU (Warehousing Audit Monitoring Unit) is
deactivated. (CAO 2-2011)
SYSTEMS USED IN WAREHOUSING
1. Automated Raw Materials Inventory
Management System (ARMIMS)
Computerized system to be adopted by the CBW
Operator as a tool to monitor the stock inventory of
imported articles.
2. Automated Bonds Management System
(ABMS)
Computerized system adopted by the BOC as a tool in
monitoring and cancellation of bonds for the liquidation
of raw materials/ entries.
3. Bar Coding System (BCS)
System that may be utilized by the BOC in identifying
and tracking certain imported articles for warehousing.
4. Client Profile Registration System (CPRS)
System of Registration that serves as a central
repository of data/information pertinent to BOC clients
and stakeholders, both internal and external, and will
include exporters other government agencies and
private entities.
5. Compliance Rate System (CRS)
Procedure to be adopted by the BOC in assessing the
degree of compliance of a warehouse operator w/
relevant CBW rules & regulations.
6. Raw Material Liquidation System (RMLS)
Automated system to be adopted by the BOC in
determining the volume & value of raw materials
exported & subject for liquidation, including D&T due on
the allowable residues/wastages/by-products.
7. Wastage Valuation Database (WVDB)
Bank of info. & reference values w/c shall be utilized by
the BOC in assessing the taxes & duties due on the
allowable residue/wastage/by-products w/c can no
longer be used for the manufacture of the articles to be
exported.
OTHER TERMINOLOGIES
1. Accessories
Articles which are neither raw materials nor supplies
w/c enhance the finished products to be exported.
2. Customs Certificate of License
Document signed by the Commissioner of Customs &
District Collector of Customs of the Port, issued to an
enterprise with an approved authority to either licensed
client/end-user.
3. Constructive Exportation/Importation
involves the sale & delivery of imported raw materials &
semi-finished products from CBW to CBMW,
PEZA/Economics Zone, Freeport, or vice versa.
4. Examination and Storage Facility
Facility of a CCBW & ICBW w/ sufficient personnel and
space for examination & storage of goods.
5. Extension Warehouse
Separate customs bonded warehousing facility granted
by the BOC to an already authorized CBW operator
when the latter’s current warehousing facilities are no
longer sufficient.
6. Multi-Purpose Declaration
Customs single administrative document accomplished
by the importer, or his duly licensed broker, under oath
and submitted to the BOC for the purposes of declaring
and identifying among others the nature of the article/s
being imported, its value, volume, weight & any relevant
description.
7. Prior Disclosure Statement (PDS)
Sworn document executed by a CBW operator &
submitted to the BOC w/c declares info. about certain
facts pertaining to the operations of CBW.
8. Semi-finished/Intermediate Products
Imported raw materials or articles have undergone
processing w/c shall be used in the further manufacture
of finished products for export.
9. Supplies
Imported consumable & disposable indirect materials
needed in the maintenance of a CBMW.
Such materials are not included in the formula of
manufacture & are not duty/tax-free unless authorized by
the BOI or exempted by DOF.
10. Transfer/Boat Note
document that accompanies the transit under guard of
bonded imported articles to PEZA/Freeport locator or to
another CBW.

11. Transit

Customs procedure under w/c goods are transported

under Customs control from one Customs office to
another or vice versa.

12. Unauthorized Withdrawal

A. Violation of Customs law committed when an

imported material entered through warehousing scheme
& destined for transit is brought to some place other than
its intended destination w/o any prior notice from the
Collector

B. Transfer of materials to a non-licensed member or

subcontractor;

C. Withdrawal of any material/article stores in CBW w/o

the duly processed withdrawal or requisition slip

D. Unauthorized substitution of materials or finished

products with local materials or articles.