Memorandum

For : The Chairman

Valuation and Classification Review Committee (VCRC)
: All VCRC members
Port of Manila (South Harbor Port )

Subject: Contending issue of export value (US$ 221,262.98 as per importation

declaration vs. US$ 288,766.94 as per VCRC findings by Imports and
Assessment Service – Valuation and Classification Division ) of shipment
of 80 Coils STC Pre-Painted Steel Sheet in Coil; consigned to
LI YUAN METAL CORP.

POSITION PAPER

FACTS

On August 20, 2015, the shipments of 80 Coils STC Pre-Painted Steel Sheet in Coil
arrived at the port from Shanghai, China, on board the vessel “ Qi Sheng”; Voyage No.: 15054;
B/L No.: SHMAL011 consigned to Liyuan Metal Corp., with business address at Paradahan 1
Tanza Cavite.

The shipment was declared under Entry No. 82472-15, with a Dutiable/Export Value of
US$ 221,262.98 under tariff heading under 7210.70.90 at 0% ACFTA rate of duty, bearing the
customs duties and taxes and other charges in the total amount of Php 1,314,469.00.

The entry was subjected to review by the VCRC Committee which assigned COOIII
Rosemary Gurrea to conduct an evaluation and his tentative computation form through the
recommendation value from Imports and Assessment Service – Valuation and Classification
Division , She reported to the VCRC his findings and recommendation indicating export value
US$ 288,766.94, under the same tariff heading of 7210.70.90 at 0% ACFTA rate of duty. The
tentative findings of Rosemary Gurrea, shows a total customs duties and other charges of Php
1,690,039.00 and resulting to discrepancy of Php 375,570.00 increase in dutiable value and
duties and taxes.
Customs Examiner Rosemary Gurrea contended in his findings through the recommendation of
Imports and Assessment Service – Valuation and Classification Division, quoted as follows: “the
value used as basis for appraisal is a value of previous similar importation, under method 3 , but
without any entry given for comparison. The article in question and previous entry as basis came
from same country of origin which is China. Recommending tentative release
under CMO No. 37-2001. the recommendation was approved by COOV Ma. Agnes Valencia.”

ISSUES
Pursuant to R.A. 9135 and implemented by CAO No. 4-2004 which amended CAO No.
5-2001, Section II (H) – the importer must be given the opportunity to provide the Bureau of
Customs (VCRC) an explanation as to the particular transaction documents it has submitted to
support its declaration hence this position paper to enlighten the Honorable Committee as to the
importer’s contention that it did not enter in the declaration of its importation under Entry No.
82472-15, all based on the Exporter’s documents.

With all due respect, Importer’s export value should prevail over the reports of findings
and recommendation of Customs Examiner Rosemary Gurrea on the following grounds:

1. There are no cited entries as basis of appraisal as a similar article from China as this
shipment in question. The truth is all previous importation by importer of the said importations
of similar articles were from China. We are not aware of any other importer which cares to the
products of China.
2. If the importations cited by Examiner Rosemary Gurrea originated from China, by virtue
economic stability index, the market prices of their products is by economic standard are higher
than the market prices of different sizes, model and capacity from the origin, like China, which
are by economic standards, exporting their products with low market prices. Under this standard
of market prices, there is no basis for comparison between Similar Articles of different models.
3. Documents submitted in support of Entry No. 82472-15, such as the invoice cannot
trigger any need of further application of other transaction value method 3 as subject
documentary evidence in support of the application of method one has been fully complied with
any further ground of confusion as to the dutiable value of the exportation. As a general rule, in
the arms length transaction, imports shall be assessed using method one of the transaction value
as defined in Section II B of CAO No. 5-2001, there is no doubt as to the truthfulness and
accuracy of the declaration in Entry No. 82472-15 with all its supporting documents, which
negates any valuation query on the application and applicability of method three, as posted by
the working examiner COOIII Rosemary Gurrea. Any other methods may be resorted to only
after conditions under method three may not be present or complied with pursuant to its
definition of application.
4. Strict compliance to the transaction value method is a mandate that the Philippines after
its adherence to the WTO Valuation Code which took effect in 1990 which the Philippines was a
signatory, this has draws the Bureau of Customs after enactment of R.A. 9135 that adopted the
WTO Transaction Value as the sole basis in the determination of the dutiable value of all goods
exported to the Philippines under the six methods. By authority of Section 18, R.A. 9135, the
Bureau of Customs put the Transaction Value as implemented under CAO No. 4-2004 into
practice with observance to all its provisions.

Section III, CAO No. 4-2004 explicitly provided that the established customs value is
only a management tool. Which declared that published or any/other reference value from
whatever source cannot be used as basis value for Customs Valuation. Such value information
may be used as a Risk Management Tool to establish doubts and to alert Customs to do a value
verification check either upfront for a system created for the purpose of Post Entry Audit.

Section II, D par. 4, CAO No. 4-2004 explicitly provided that such transaction value of
similar goods shall be adjusted upwards or downwards to account for demonstrated differences
between the goods being valued and the similar goods to take account of commercial level
differences

PRAYER

Wherefore in consideration of all the above premises, we hereby honestly pray that the
Honorable VCRC Committee will reconsider its primary / tentative findings and
recommendation and render a Committee a decision upholding the export value as declared by
herein importer under Entry Declaration No. 82472-15.

Respectfully Submitted

, POM, Manila

LI YUAN METAL CORP.

By: _____________________________
Authorized Representative