CAO No.

4-94 (Fines and Penalties)

Lack of BIS-FTEB prior authority

Lack of one year residency abroad
Lack of proof of income abroad
Lack of 6 months use/registration

Penalty
Non- compliance of one (1) of the above requirements 20%
Non-compliance of two (2) of the above requirements 30%
Non-compliance of thee (3) of the above requirements 50%
Non-compliance of all the above requirements 80%

Second violation of any of the above requirements 80%

Third violation No settlement by fine

Other Violation (No clearance, import permit, license)

First Violation 30%

Second Violation 80%
Third Violation No settlement by fine

Computation of Fines under CAO4-94 (Used Motor Vehicles of Returning Residents/Brand New
MVs)

Illustration 37: 1. Dr. Pilar H. Olalia, a returning resident, brought a 2019 EX5-BMW sedan, A/T and
gasoline type. The customs value as declared is US21,224.00, ocean freight is USD720.50 and insurance
is USD615.70, RE PHP50.205, ETA Jan. 5, 2021, South Harbor, gross weight 5,350.00 pounds and
measurement 3.455m3. The ISP/MSP as found by the BOC is PHP 1.14M. Dr. Olalia failed to secure the
FTEB/BIS for the car. Compute DV, CUD, AVT, LC, VAT, fine and TADG.

Illustration 38: 1. Mr. Dan S. Ayuda , an OFW from Australia, brought a 2016, Civic Honda sedan, M/T
and gasoline type. The customs value as declared is US12,452.00, ocean freight is USD540.50 and
insurance is USD425.70, RE PHP50.205, ETA Feb. 1, 2021, MICP, gross weight 2,820.00 kgs. and
measurement 3.55m3. The ISP/MSP as found by the Customs Officer is PHP 650,200.00. Mr. Ayuda
failed to secure the following requirements: lack of proof of income in Australia, lack of one year
residency requirement and lack of 6 months used of the car. Compute DV, CUD, AVT, LC, VAT, fine and
TADG.

Computation of Other Fines (No Import Permits) CAO4-94

Illustration 39: VIDOC Inc., Makati City imported 2 pkgs. STC regulated items from Kamikaze Limited,
Tokyo, Japan. The shipment arrived via MV Asian Pearl, Voyage No. DN34 and covered by B/L No. 1209-
JPN-PHL. The commercial invoice reveals the following information: Total FOB/Customs Value is
US15,504.50, paid via L/C through BPI, Makati City, gross weight is 3,350.50 kgs., ocean freight is
USD345.70, measurement is 1.55 cbm and insurance premium is USD312.20.

During the assessment at the FED, the COOV discovered that VIDOC Inc. failed to secure the required
import clearance from the concerned government agency. The COOV also found out that this was the
first infraction of the importer. RE is PHP48.955 and applicable RD is 7% ad valorem. Compute DV, CUD,
AVT, LC, VAT, fine and TADG.

Illustration 40: ASF-BABS Inc., Philippines received 1 x 45’ STC regulated items from Dark Pte. Ltd.,
Jurong , Singapore. The shipment arrived on Jan. 18, 2021. The commercial invoice shows the following
information: Total ex-work price is USD32,204.00, paid via telegraphic transfer, gross weight is
13,805.20 kgs. and measurement is 16.255 cbm.

During the assessment at the FED-MICP, the Customs Officer discovered that ASF-BABS Inc., failed to
secure the import permit from the regulatory agency. The investigation also revealed that the importer
was fined before for the same violation and paid a 30% penalty. RE is PHP48.3505, sea freight is
USD800.20, insurance is USD650.25, selling commission is USD250.40 and handling USD180.80.
Shipment is classified as general cargo. Applicable RD is 10% ad valorem. Compute DV, CUD, AVT, LC,
VAT, fine and TADG.

Marking Duty (Sec. 710, CMTA, 5% of DV)

Illustration 41: HRSP Inc., Caloocan City imported 3 cartons STC non-regulated items from El Chaps
Limited, Hong Kong. The shipment arrived via Cathay Pacific covered by AWB No. 129-290-304. The
commercial invoice reveals the following information: Total FOB/Customs Value is US12,904.50, paid via
L/C through BDO, Binondo, Manila, chargeable weight is 230.20 kgs., air freight is USD1.35/kgs.,
measurement is 45x60x60 cms., insurance premium is USD212.20 and total CFR is USD13,215.27.

During intrusive examination, Mr. Henry L. Masungit, COOIII found that the cartons were not properly
marked with the country of origin or manufacture. The FED-NAIA recommended the imposition of the
marking duty pursuant to Sec. 710 of the CMTA. RE is PHP49.345 and RD is 3% ad valorem. Compute DV,
CUD, AVT, LC, VAT, marking duty and TADG.
Dumping Bond (Sec. 711, RA 10863)

Normal Value minus declared/entered value = Anti-Dumping Bond

Normal Value as Found (Final Normal Value) minus declared/entered value = Dumping Duty

Illustration 42: In an administrative proceeding for dumping before the DOF, the TC after evaluation and
investigation of available documents, recommended the normal value of PHP215,000.00 of a certain
item from the original normal value in protest of PHP240,000.00 against the entered value of
PHP190,000.00 of the shipment under consideration. The case was resolved by the TC. Shipment is
subject to 15% ad valorem.

Solution:

Computation of Dumping Bond

Original normal value PHP235,000.00

Less: Entered/Declared Value 190,000.00
Amount of Cash Bond PHP 45,000.00

Computation of Dumping Duty

Final Normal Value AF PHP215,000.00

Less: Entered/Declared Value 190,000.00
Dumping Duty PHP 25,000.00

Computation of Rewards (Sec. 1512 of the CMTA, 20% of the proceeds of sale or 20% of the
actual collection of duties, taxes and other charges)

Illustration 43: Mr. Allan I. Nahas, a Customs informer gave the Custom Intelligence and Investigation
Service confidential and reliable information regarding smuggled goods in the possession of ABC Inc., a
private bonded warehouse. The agents of the CIIS were able to seize and confiscate some imported
goods with a worth of PHP5,200,000.00, landed cost. The goods were sold in a public auction by the
BOC-Auction and Cargo Disposal Division to the highest bidder for PHP4,250,000.00. Compute the
applicable reward.

Illustration 44: Due to reliable and confidential information of Cesar N. Guso, a non-BOC informer, the
Liquidation and Billing was able to re-compute the correct duties, taxes and other charges paid by the
importer, Palusot Inc., Phils. The total amount paid by the importer as declared was PHP7,250,230. Mr.
Guso gave the LBD documents showing the correct dutiable value of the goods in question. As
liquidated, the correct amount representing duties, taxes and other charges should be PHP8,350,500.00.
Compute the applicable reward.

Computation of CUD and Tax for Cost of Repair Sec. 800 (c), RA 10863, 30% of the DV

Illustration 45: A shipment of one (1) unit Waste Incinerating Machine was shipped for repair by
Sakuragi Inc., Phils. to Xerox Inc., Tokyo, Japan. The machine was properly documented and a Cert. of
Identification was issued by the BOC prior departure. In repairing the item, Xerox Inc. incurred
USD520.80, replacement parts and the cost of labor is USD210.00. In shipping back the machine into the
Philippines, Sakuragi Inc. paid an ocean freight of USD350.00 and insurance premium of USD420.50.
Estimated local charges is PHP3,400.70. The original dutiable value computation was PHP4,200,540.00
and RD is 5% ad valorem. Compute the imposable CUD, tax and other charges. RE is PHP50.25.