Customs

Administrative
Order No. 5-
2002
Rules and Regulation in the
Importation of Articles through the
Customs Bonded Trading
Warehouse
Let’s Review….

Customs Bonded Warehouses are

classified into 4 categories:
1. Customs Bonded
Manufacturing Warehouse
2. Public/Private Bonded
Warehouse
3. CUSTOMS BONDED
TRADING WAREHOUSE
4. Multi-National Regional
Warehouse
 Table of Contents
--------------------------------
I. Objectives
II. Definition
III. Administrative
Provisions
IV. Operational Provisions
V. Repealing Clause
 I. Objectives
1.1 To rationalize the
operations of a Customs
Bonded Trading Warehouses
(CBTW’s)

1.2 To ensure that

CBTW’s are not utilized as
shield for non-payment of the
rightful duties and taxes due
to the Government
 II. Definition
A Bonded Trading Warehouse (BTW) is a warehouse run by a Registered
Export Trading Company (RETC) that has been officially registered with the
BOI and permitted by the Bureau of Customs to receive imported cargoes,
excluding textiles and accessories used in the fabrication of garments, for
storage and subsequent sale to an export producer running a Customs
Bonded Manufacturing Warehouse, or for transfer to a legally certified export
producer.
For example:
REGENT FOODS
CORPORATION
 III. Administrative Provisions
1. Applicability of Rules Governing other CBW’s
1.1 The application, documentary requirements, evaluation of
applications, responsibilities of the operator and all the other provisions
governing other CBW’s shall also apply to a CBTW. (Proceed to TITLE III
ADMINISTRATIVE PROVISIONS of CAO-02-91 from section 27-39)
 
Section 27. Application to Establish a Bonded Warehouse.
The Application to operate a customs bonded warehouse shall be
submitted to the commissioner of Customs through the District Collector.
District Collector Commissioner
Section 28. Evaluation of the Application.
The District Collector shall pass upon the merits of the application to
operate a customs bonded warehouse, including applications for
membership and subcontracting to a common bonded manufacturing
warehouse. The District Collector shall also evaluate the application to
operate Multinational Regional Warehouse, and submit his recommendation
to the Board of Investments
Section 29. Approval of the Application.
The Commissioner of Customs shall approve the
application as endorsed by the District Collector.
Section 30. Operational Requirements.
Before the bonded warehouse shall be allowed to operate, it shall be
registered with the Customs Collection District having jurisdiction over it. The
District Collector shall assign to it a warehouse number, and inform the
operator the approval, subject to the Bureau’s additional requirements
before actual operation.
Section 31. Warehousing Fee.
Before commencing operations, bonded
warehouses shall pay the current prescribed
warehousing fee.
Section 32. Assignment of Customs Personnel.
Unless the commissioner provides otherwise, the District Collector
having jurisdiction shall assign such number of customs personnel necessary
to supervise the operation of the customs bonded warehouse. The operator
shall provide the customs personnel with suitable working areas complete
with office equipment and supplies.
Section 33. Work Hours.
Customs employees assigned to customs bonded warehouses shall
strictly observe regular office hours and record their attendance in
accordance with Civil service rules and regulations. The operator shall
promptly report to the District Collector any absences. The services of the
Customs personnel requested by the operator which are performed outside
the regular hours, including Sundays and holidays, shall be considered
overtime.
Section 34. Locks.
The entrance to the Customs Bonded Warehouse shall
have two (2) locks. The key to one shall be kept by the
customs personnel assigned to the warehouse. The duplicates
of all keys shall be submitted to the District Collector of
safekeeping.
Section 35. Principal Books and Documents.
The Commissioner of Customs shall require the operator of the bonded
warehouse to maintain a principal book at a designated place for a period of
five (5) years. The book shall contain information relevant to the operation
of the warehouse. In addition, the operator shall keep in the file for the same
period of five years all documents on its operations. Where there are
customs personnel assigned to the warehouse, the books and documents
shall be kept and maintained by them.

Five (5) years

relevant to the operation of the warehouse

Section 36. Central Office Principal Book.
A principal book shall also be maintained and kept at the
Bonded Warehouse Division concerned.
Section 37. Audits.
An audit team from the office of the District Collector shall conduct
regular audits of customs bonded warehouse at least once a year, unless
sooner directed by the Commissioner Customs or the District Collector.
The audit team shall monitor the operations of the bonded warehouses,
as well as determine compliance with rules and regulations governing
them.
Section 38. Renewal of Licenses.
Licenses of customs bonded warehouses shall be
renewed every two (2) years.
Section 39. Suspension/Revocation of Licenses.
The District Collector may suspend, discontinue or revoke the license
to operate a customs bonded warehouse either for any violation committed
by the operator, or upon the request of the operator. The license of the
Common Bonded Manufacturing Warehouse may also be suspended or
revoked for any violation committed by any of its members, unless the
operator informs the Bureau within 48 hours upon learning of the illegal
activities of the member.
 III. Administrative Provisions
1.2 No finished article shall be allowed to be imported
through a CBTW except when such finished article will be
used in the manufacture or production of another finished
product for export.

used in the
manufacture or
except production of another
finished product for
export.
 IV. Operational Provisions
1. Importable Articles:
1.1 CBTW’s may import not among those found in the
Negative List of Importable Materials of CBTW’s which is
attached as Annex “A” hereof.
 1.2 If articles as listed in Annex “A” hereof are found to have been
imported by a CBTW after the effectivity of this order, the first such
importation in violation of No. IV 1.1 of this order shall be made to pay full
duties and taxes and suspension of the operation of the warehouse for one
month for the second importation/offense, the importation shall be made to
pay full duties and taxes and audit by the warehouse audit and monitoring
unit and for the third importation/offense, payment of full duties and taxes
and closure of the warehouse in accordance with rules and regulations.
1st Offense 2nd Offense 3rd offense
---------------------------- --------------------------- ---------------------------
>Pay full duties and >Pay full duties and >Pay full duties and
taxes taxes taxes
>Suspension of the
operation of the
>Pay audit by the >Closure of the
warehouse for one
warehouse audit and warehouse
month
monitoring unit
 1.3 The concerned operating division shall maintain a data
bank of all article imported by CBTW’s, which shall at all times
be made accessible to Warehousing Audit and Monitoring Unit-
Intelligence and Enforcement Group(WAMU-IEG) for
monitoring and/or audit purposes.
 1.4 There will be a periodic review of the impossible
articles that could be included in or excluded from the
negative list.
 IV. Operational Provisions
2. Requirements to Transfer:
2.1 Unless the Commissioner of Customs allows direct
transfer, articles imported by bonded trading warehouses
shall be examined, appraised and bonds filed before these
are transferred.
>Examined
>Appraised
>Bonds filed
 2.2 Transfers of articles to the bonded trading warehouses shall be
through a warehousing or transshipment permit. In the case of
transshipments, the operator shall file the warehousing entry within five (5)
days from date of transfer, which period may be extended for another five
days by the District Collector. The transfer of imported articles from the
Customs zone to the warehouse shall be under continuous guarding by
customs guard(s) until delivery at the warehouse is acknowledged in 6 the
covering boat note by the customs personnel assigned thereat or by the
duly designated accountable officer of the operator.
 IV. Operational Provisions
3. Withdrawal of Articles from the CBTW’s:
3.1 Imported articles may be withdrawn from the warehouse either for
manufacture into export products; for repacking for distribution to foreign
markets; or for sale to manufacturing bonded warehouses or to Common
Bonded Warehouse operator for use in the manufacture of goods for
export.
1. For manufacture into export products
2. For repacking for distribution to foreign
markets
3. For sale to manufacturing bonded
warehouses
4. To Common Bonded Warehouse
operator for use in the manufacture of
goods for export.
 IV. Operational Provisions
4. Liquidation of Articles:
4.1 Export products which are manufactured in an accredited customs
bonded manufacturing warehouses or are repacked in a multinational
regional warehouse shall be exported within the prescribed period;
otherwise the operator shall pay duties, taxes and other charges for articles
not exported, or the remaining materials shall be surrendered to the Bureau
of Customs within 3 months after lapse of the prescribed period of nine
months.
Prescribed period pay duties, taxes
and other
charges
 4.2 Wastages and by-products in the manufacture of export
products shall be properly accounted for and disposed of in
accordance with existing rules and regulations.
4.3 Before bonds are canceled, the raw materials shall have
to be liquidated first together with the entry within the
prescribed period.

Bonds
 V. Repealing Clause
The following Administrative Orders are hereby repealed:
>CAO 2-91 Rules and Regulation for the Establishment, Operations, Supervision,
and Control of Customs Bonded Warehouses.
>CAO 2-79 Rules and Regulation for the Establishment, Operation, Supervision
and Control of Bonded Manufacturing Warehouse.
>CAO 1-80 Amendment to CAO 2-79
>CAO 4-80 Rules and Regulations Governing Customs Recommendation,
Supervision and Control of Operation and Activities of Multinational Regional
Warehouses.
>CAO 5-80 Rules and Regulations Governing Customs Recommendation,
Supervision and Control of Private/Public Bonded Warehouses.
>CAO 4-81 Rules and Regulations Governing Customs Recommendation,
Supervision and Control of Customs Bonded Trading Warehouses. Other Custom
Administrative Orders, Memorands, Circulars, and rules and regulations
inconsistent herewith are also superseded or amended accordingly.