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TARIFF AND CUSTOMS LAWS OF THE PHILIPPINES


This page features the full text of
    Republic Act No. 1937
Tariff and Customs Code of the Philippines
AN ACT TO REVISE AND CODIFY THE TARIFF AND CUSTOMS LAWS OF THE PHILIPPINES

A DECREE TO CONSOLIDATE AND CODIFY ALL THE TARIFF AND CUSTOMS LAWS OF THE PHILIPPINES
Presidential Decree No. 1464
AN ACT AMENDING CERTAIN PROVISIONS OF PRESIDENTIAL DECREE NO. 1464, OTHERWISE KNOWN AS THE TARIFF AND CUSTOMS CODE OF THE PHILIPPINES, AS AMENDED, AND FOR OTHER PURPOSES.
Republic Act No. 9135
AN ACT TO REVITALIZE AND STRENGTHEN THE BUREAU OF CUSTOMS, AMENDING FOR THE PURPOSE CERTAIN SECTIONS OF THE TARIFF AND CUSTOMS CODE OF THE PHILIPPINES, AS AMENDED.
Republic Act No. 7651
AN ACT REPEALING SECTION 1404 AND AMENDING SECTIONS 1401 AND 1403 OF THE TARIFF AND CUSTOMS CODE OF THE PHILIPPINES, AS AMENDED, RELATIVE TO THE PHYSICAL EXAMINATION OF IMPORTED ARTICLES.
Republic Act No. 7650
QUICK INDEX
OF THE
TARIFF AND CUSTOMS CODE OF THE PHILIPPINES
BOOK I
Tariff Law

Title I - Import Tariff
Title II - Administrative Provisions
BOOK II
Customs Law

Title I - The Bureau of Customs
Title II - Registration of Vessels, Coastwise Trade and Licensing of Marine Officers
Title III - Vessels and Aircraft in Foreign Trade
Title IV - Ascertainment, Collection and Recovery of Import Duty
Title V - Warehousing of Imported Articles
Title VI - Administrative and Judicial Proceedings
Title VII - Fees, Dues and Charges Collectible by the Bureau of Customs
Title VIII - General Provisions
.

REPUBLIC ACT NO. 1937
 
. AN ACT TO REVISE AND CODIFY THE TARIFF AND CUSTOMS LAWS OF THE PHILIPPINES
 
 
PRELIMINARY SECTION. — This Act shall be known as the "Tariff and Customs Code of the Philippines"
 


BOOK I
TARIFF LAW 

TITLE I
IMPORT TARIFF 
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Section 101. Imported Articles Subject to Duty. — All articles, when imported from any foreign country into the Philippines, shall be subject to duty upon each importation, even though previously exported from the Philippines, except as otherwise specifically provided for in this Code or in other laws.  chanrobles virtual law library
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Sec. 102. Prohibited Importations. — The importation into the Philippines of the following articles is prohibited: 

a. Dynamite, gunpowder, ammunitions and other explosives, firearm and weapons of war, and detached parts thereof, except when authorized by law. 
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b. Written or printed article in any form containing any matter advocating or inciting treason, rebellion, insurrection or sedition against the Government of the Philippines, of forcible resistance to any law of the Philippines, or containing any threat to take the life of or inflict bodily harm upon any person in the Philippines. 
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c. Written or printed articles, photographs, engravings, lithographs, objects, paintings, drawings or other representation of an obscene or immoral character. 
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d. Articles, instruments, drugs and substances designed, intended or adapted for preventing human conception or producing unlawful abortion, or any printed matter which advertises or describes or gives directly or indirectly information where, how or by whom human conception is prevented or unlawful abortion produced. 
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e. Roulette wheels, gambling outfits, loaded dice, marked cards, machines, apparatus or mechanical devices used in gambling, or in the distribution of money, cigars, cigarettes or other articles when such distribution is dependent upon chance, including jackpot and pinball machines or similar contrivances.
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f. Lottery and sweepstakes tickets except those authorized by the Philippine Government, advertisements thereof and lists of drawings therein. 
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g. Any article manufactured in whole or in part of gold silver or other precious metal, or alloys thereof, the stamps brands or marks of which do not indicate the actual fineness or quality of said metals or alloys. 

h. Any adulterated or misbranded article of food or any adulterated or misbranded drug in violation of the provisions of the "Food and Drugs Act."

i. Marihuana, opium poppies, coca leaves, or any other narcotics or synthetic drugs which are or may hereafter be declared habit forming by the President of the Philippines, any compound, manufactured salt, derivative, or preparation thereof, except when imported by the Government of the Philippines or any person duly authorized by the Collector of Internal Revenue, for medicinal purposes only. 

j. Opium pipes and parts thereof, of whatever material. 

k. All other articles the importation of which is prohibited by law.  chanrobles virtual law library

Sec. 103.Abbreviations. — The following abbreviations in this Code shall represent the terms indicated:chanroblesvirtuallawlibrary

ad. val. For ad valorem
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e.g. For exempli gratia, meaning "for example"
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i.e. For id est, meaning "that is"
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hd. For head
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kgs. For kilograms
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l. For liter
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g.w. For gross weight
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l.w. For legal weight
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n.w. For net weight 

Sec. 104. Rates of Import Duty. — There shall be levied, collected and paid upon all imported articles the following rates of duty, except as otherwise specifically provided for in this Code.
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(This portion containing the voluminous description of rates of import duties, has been deleted for the convenience of readers who are more interested on the substantive provisions of the Code)
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Sec. 105. Conditionally Free Importations. — The following articles shall be exempt from the payment of import duties upon compliance with the formalities prescribed in, or with the regulations which shall be promulgated by the Commissioner of Customs with the approval of the department head: 
a. Animals and plants for scientific, experimental, propagation, botanical, breeding, zoological and national defense purposes: Provided, That no live trees, shoots, plants and moss, and bulbs, tubers and seeds for propagation purposes may be imported under this section, except by order of the Government of the Philippines or other duly authorized institutions: Provided, further, That the free entry of animals for breeding purposes shall be restricted to animals of a recognized breed, duly registered in the book of record established for that breed: And Provided, finally, That certificate of such record, and pedigree of such animal duly authenticated by the proper custodian of such book of record, shall be produced and submitted to the Collector of Customs, together with affidavit of the owner or importer, that such animal is the identical animal described in said certificate of record and pedigree.
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b. Aquatic products (e.g., fish, crustaceans, mollusks, marine animals, seaweed, fish oil, roe), including preparations or manufactures thereof, caught or gathered by vessels of Philippine registry: Provided, That they are imported in such vessels or in crafts attached thereto: And Provided, further, That they have not been landed in any foreign territory or, if so landed, they have been landed solely for transshipment without having been advanced in condition. 
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c. Samples of the kind, in such quantity and of such dimensions or construction as to render them unsalable or of no appreciable commercial value, models not adapted for practical use and samples of medicine properly marked "physicians' samples not for sale". 
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Commercial samples, except those that are not readily and easily identifiable (e.g., precious and semi-precious stones, cut or uncut, and jewelry set with precious or semi-precious stones), the value of any single importation of which does not exceed ten thousand pesos, upon the giving of a bond in an amount equal to one and one-half times the ascertained duties, taxes and other charges thereon, conditioned for the exportation of said samples within six months from the date of the acceptance of the import entry, or in default thereof, the payment of the corresponding duties, taxes and other charges. If the value of any single consignment of such commercial samples exceeds ten thousand pesos, the importer thereof may select any portion of same not exceeding in value ten thousand pesos for entry under the provisions of this subsection, and the excess of the consignment may be entered in bond, or for consumption, as the importer may elect. 
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d. Articles, including binnacles, propellers, and the like, the character of which, as imported, prevents their use for other purposes than the construction, equipment, or repair of vessels and aircraft, and life-preservers and life buoys, related equipment and parts and accessories thereof, which are necessary for the take-off and landing and for the safe navigation of vessels and aircraft. 
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e. Equipment for use in the salvage of vessels or aircraft, upon identification and the giving of a bond in an amount equal to one and one-half times the ascertained duties, taxes and other charges thereon, conditioned for the exportation thereof or payment of the corresponding duties, taxes and other charges within six months from the date of acceptance of the import entry: Provided, That the Collector of Customs may extend the time for exportation or payment of duties, taxes and other charges for a term not exceeding six months from the expiration of the original period. 
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f Cost of repairs made in foreign countries upon vessels or aircraft documented, registered or licensed in the Philippines, upon proof satisfactory to the Collector of Customs (1) that adequate facilities for such repairs are not afforded in the Philippines, or (2) that such vessels or aircraft, while in the regular course of her voyage or flight was compelled by stress of weather or other casualty to put into a foreign port to make such repairs in order to secure the safety seaworthiness or airworthiness of the vessel or aircraft to enable her to reach her port of destination. 
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g. Articles brought into the Philippines for repair, processing or reconditioning to be re-exported upon completion of the repair, processing or reconditioning: Provided, That the Collector of Customs may, in his discretion, require the giving of a bond in an amount equal to one and one-half times the ascertained duties, taxes and other charges thereon, conditioned for the exportation thereof or payment of the corresponding duties, taxes and other charges within six months from the date of acceptance of the import entry.
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h. Medals, badges, cups and other small articles bestowed as trophies or prizes, or those received or accepted as honorary distinctions. 

i. Wearing apparel and household effects, including those articles provided for under subsections "j" and "k", and belonging to residents of the Philippines returning from abroad, which were exported from the Philippines by such returning residents upon their departure therefrom or during their absence abroad, upon the identity of such articles being established to the satisfaction of the Collector of Customs; personal and household effects brought into the Philippines by returning residents, the export value of which does not exceed five hundred pesos, solely for personal or household use but not imported for the account of any other person nor intended for barter, sale or hire: Provided, That such returning residents have not received the benefit of any exemption hereunder within one hundred and eighty days from and after the date of the last exemption granted: And Provided, further, That in the event the total export value of the imported article or articles exceeds the amount of five hundred pesos, such article or articles shall be subject to duty only on the amount in excess of five hundred pesos; articles of the same kind and class purchased in foreign countries by residents of the Philippines during their absence abroad and accompanying them upon their return to the Philippines, or arriving within a reasonable time which in no case shall exceed ninety (90) days before or after the owner's return, upon proof satisfactory to the Collector of Customs that same have been in their use abroad for more than one year; articles in any single shipment consigned to any single person when the total export value of such shipment does not exceed one hundred pesos: Provided, finally, That when the export value exceeds the amount of one hundred pesos, only the amount in excess of one hundred pesos shall be subject to duty. 

j. Wearing apparel, articles of personal adornment, toilet articles, portable tolls and instruments, theatrical costumes, and similar personal effects, accompanying travelers or tourists in their baggage or arriving within a reasonable time, in the discretion of the Collector of Customs, before or after the owners, in use of and necessary and appropriate for the wear or use of such persons according to their profession or position for the immediate purposes of their journey and their present comfort and convenience: Provided, That this exemption shall not be held to apply to articles intended for other persons or for barter, sale or hire: Provided, further, That the Collector of Customs may, in his discretion, require a bond in an amount equal to one and one-half times the ascertained duties, taxes and other charges upon articles classified under this subsection, conditioned for the exportation thereof or payment of the corresponding duties, taxes and other charges, within six months from the date of acceptance of the import entry: And Provided, finally, That the Collector of Customs may extend the time for exportation or payment of duties, taxes and other charges for a term not exceeding six months from the expiration of the original period.

k. Vehicles, horses, harness, bed and table linen, table service, furniture, musical instruments and personal effects of like character, owned and imported by travelers or tourists for their convenience and comfort, upon identification and the giving of a bond in an amount equal to one and one-half times the ascertained duties, taxes and other charges thereon, conditioned for the exportation thereof or payment of the corresponding duties, taxes and other charges within six months from the date of acceptance of the import entry: Provided, That the Collector of Customs may extend the time for exportation or payment of duties, taxes and other charges for a term not exceeding six months from the expiration of the original period. 
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l. Professional instruments and implements, tools of trade, occupation or employment, wearing apparel, domestic animals, and personal and household effects, including those of the kind and class provided for under subsections "j" and "k" and belonging to persons coming to settle in the Philippines, in quantities and of the class suitable to the profession, rank or position of the person importing them, for their own use and not for barter or sale, accompanying such persons, or arriving within a reasonable time, in the discretion of the Collector of Customs, before or after the arrival of their owners, upon the production of evidence satisfactory to the Collector of Customs that such persons are actually coming to settle in the Philippines, that the articles are brought from their former place of abode, that change of residence is bona fide, and that the privilege of free entry under this subsection has never been previously granted to them: Provided, That neither merchandise of any kind, nor machinery or other articles for use in manufacture, shall be classified under this subsection. 

m. Animals, vehicles, portable theaters, circus and theatrical equipment, including musical instruments, sceneries, panoramas, properties, saddlery, wax figures and similar objects for public entertainment, and other articles for display in public expositions, or for exhibition or competition for prizes, and devices for projecting pictures and parts and appurtenances therefor, upon identification and the giving of a bond in an amount equal to one and one-half times the ascertained duties, taxes and other charges thereon, conditioned for exportation thereof or payment of the corresponding duties, taxes and other charges within six months from the date of acceptance of the import entry: Provided, That the Collector of Customs may extend the time for exportation or payment of duties, taxes and other charges for a term not exceeding six months from the expiration of the original period; and technical and scientific films when imported by technical, cultural and scientific institutions, and not to be exhibited for profit: Provided, That if any of the said films is exhibited for profit, the proceeds therefrom shall be subject to confiscation, in addition to the penalty provided under section three thousand six hundred and ten of this Code.

n. Articles (e.g., photographic, sound recording, electrical and other equipment, vehicles, animals, costumes, apparel, properties, supplies, unexposed motion picture films) brought by foreign producers for making or recording motion pictures on location in the Philippines, upon identification and the giving of a bond in an amount equal to one and one-half times the ascertained duties, taxes and other charges thereon, conditioned for exportation thereof or payment of the corresponding duties, taxes and charges within six months from the date of acceptance of the import entry. Unexposed motion picture films allowed free entry under bond for exportation falling within this subsection and subsequently exposed, whether or not developed, may be reexported free of import duties, taxes and other charges. 
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Negative films, undeveloped, exposed outside the Philippines by resident Filipino citizens or by producing companies of Philippine registry where the principal actors and artists employed for the production are Filipinos, upon affidavit by the importer that such exposed films are the same films previously exported from the Philippines. As used in this paragraph, the terms "actors" and "artists" include the persons working the photographic camera or other photographic and sound recording apparatus by means of which the film is made. 
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o. Costumes, regalia and other articles, including office supplies and equipment, imported for the official use of members and attaches of foreign embassies, legations, consular officers and other representatives of foreign government: Provided, That the country which any such person represents accords like privileges to corresponding officials of the Philippines. 
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Articles imported for the personal or family use of the members and attaches of foreign embassies, legations, consular officers and other representatives of foreign governments: Provided, That such privilege shall be accorded under special agreements between the Philippines and the countries which they represent: And Provided, further, That the privilege may be granted only upon specific instructions of the Department of Finance in each instance which will be issued only upon request of the Department of Foreign Affairs.

p. Regalia, gems, statuary, specimens or casts of sculptures imported for the bona fide use and by the order of any society incorporated or established solely for religious, philosophical, educational, scientific or literary purposes, or for the encouragement of the fine arts, or for the use and by the order of any institution of learning, public library, museum, orphan asylum or hospital, and not for barter, sale or hire: Provided, That the term "regalia" shall be held to embrace only such insignia of rank or office or emblems as may be worn upon the person or borne in the hand during public exercises or ceremonies of the society or institution, and shall not include articles of furniture or fixtures, or ordinary wearing apparel, nor personal property of individuals. 

q. Musical organs imported for the bona fide use and by the owner of any society incorporated or established for religious or educational purposes, or, expressly for presentation thereto. 

r. Scientific apparatus, instruments and utensils specially imported for the bona fide use and by the order of any society or institution incorporated or established solely for educational, scientific, or charitable purposes, or for the encouragement of the fine arts, or for the bona fide use and by the order of any institution of learning in the Philippines, and not for barter, sale or hire. 

s. Philosophical, historical, economic, scientific, technical and vocational books specially imported for the bona fide use and by the order of any society or institution, incorporated or established solely for philosophical, educational, scientific, charitable or literary purposes, or for the encouragement of the fine arts, or for the bona fide use of and by the order of any institution of learning in the Philippines: Provided, That the provisions of this subsection shall apply to books not exceeding two copies of any one work when imported by any individual for his own use, and not for barter, sale or hire. 

Bibles, missals, prayerbooks, koran, ahadith and other religious books of similar nature and extracts therefrom, hymnal and hymns for religious uses, specially prepared books, music and other instrumental aids for the deaf, mute or blind, and textbooks prescribed for use in any school in the Philippines: Provided, That complete books published in parts in periodical form shall not be classified herein.

t. Newsprint, whenever imported by or for publishers for the exclusive use in the publication of newspapers. 

u. Articles donated to public or private institutions established solely for educational, scientific, cultural, charitable, health, relief, philanthropic or religious purposes, for free distribution among, or exclusive use of, the needy. 

v. Food, clothing, house-building and sanitary-construction materials, and medical, surgical and other supplies for use in emergency relief work, when imported by or directly for the account of any victim, sufferer, refugee, survivor or any other person affected thereby, or by or for the account of any relief organization, not operated for profit, for distribution among the distressed individuals, whenever the President shall, by proclamation, declare an emergency to exist by reason of a state of war, pestilence, cholera, plague, famine, drought, typhoon, earthquake, fire, flood and similar conditions: Provided, That the importation free of duty of articles described in this herein subsection shall continue only during the existence of such emergency, or within such limits and subject to such conditions as the President may, by his proclamation, deem necessary to meet the emergency. 

w. Philippine articles previously exported from the Philippines and returned without having been advanced in value or improved in condition by any process of manufacture or other means, and upon which no drawback or bounty has been allowed, and foreign articles when returned after having been loaned and exported for use temporarily abroad solely for exhibition, examination or experimentation, for scientific or educational purposes, and foreign containers packed with exported Philippine articles and returned empty if imported by or for the account of the person or institution who exported them from the Philippines and not for sale, subject to identification: Provided, That any Philippine article falling under this subsection upon which drawback or bounty has been allowed shall, upon re-importation thereof, be subject to a duty under this subsection equal to the amount of such drawback or bounty. 

x. Large containers (e.g., demijohns, cylinders, drums, casks and other similar receptacles of metal, glass or other material) which are, in the opinion of the Collector of Customs, of such a character as to be readily identifiable may be delivered to the importer thereof upon identification and the giving of a bond in an amount equal to one and one-half times the ascertained duties, taxes and other charges thereon, conditioned for the exportation thereof on payment of the corresponding duties, taxes and other charges within one year from the date of acceptance of the import entry. 

y. Supplies or ship stores listed as such for the use of the vessel; supplies which are intended for the reasonable requirements of the vessel in her voyage outside the Philippines, including such articles transferred from a bonded warehouse in any collection district to any vessel engaged in foreign trade, for use or consumption of the passengers or its crew on board such vessel as sea stores; or articles purchased abroad for sale on board a vessel as saloon stores or supplies: Provided, That any surplus or excess of such ship, sea or saloon stores arriving from foreign ports shall be dutiable according to the corresponding heading or subheading.

z. Articles and salvage from vessels recovered after the period of two years from the date of filing the marine protest or the time when the vessel was wrecked or abandoned as determined by the Collector of Customs, or such part of Philippine vessel or her equipment, wrecked or abandoned in Philippine waters or elsewhere: Provided, That articles and salvage recovered within the said period of two years shall be dutiable according to the corresponding heading or subheading. 
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aa. Articles of easy identification exported from the Philippines for repairs abroad and subsequently reimported: Provided, That the cost of the repairs made to any such article shall pay a rate of duty of twenty-five per cent ad valorem
bb. Coffins or urns containing human remains, bones or ashes, and all articles for ornamenting said coffins or urns and accompanying same; used personal and household effects, not merchandise, of deceased persons, upon identification as such, satisfactory to the Collector of Customs.
Sec. 106. Drawbacks:   a. On Fuel Used for Propulsion of Vessels. — On all fuel imported into the Philippines which is afterwards used for the propulsion of vessels of Philippine registry engaged in trade with foreign countries, or in the coastwise trade, a refund shall be allowed equal to the duty imposed by law upon such fuel, less one per cent thereof, which shall be paid under such rules and regulations as may be prescribed by the Commissioner of Customs with the approval of the department head. 
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b. On Articles Made from Imported Materials or Similar Domestic Materials and Wastes Thereof— Upon the exportation of articles manufactured or produced in the Philippines, including the packing, covering, putting up, marking or labeling thereof, either in whole or in part of imported materials, or from similar domestic materials of equal quantity and productive manufacturing quality and value, such question to be determined by the Collector of Customs, there shall be allowed a drawback equal in amount to the duties paid on the imported materials so used, or where similar domestic materials are used, to the duties paid on the equivalent imported similar materials, less one per cent thereof: Provided, That the exportation shall be made within three years after the importation of the foreign material used or constituting the basis for drawback: And Provided, further, That when the articles exported or coverings thereof are in part of materials grown or produced in the Philippines not entitled to drawback under this section, the imported materials, or the similar domestic materials of equal quantity and productive manufacturing quality and value entitled to drawback, shall so appear in the completed articles or packages that the quantity or measure thereof may be ascertained: And Provided, finally, That the imported materials, or the similar domestic materials entitled to drawback under this section for which drawback is claimed, shall be identified; that the quantity of such materials used and the amount of duty paid thereon or, if the domestic materials, paid upon its equivalent, shall be ascertained; and that the fact of their exportation shall be established; and the refund if made shall be paid to the manufacturer, producer, or exporter, or to the duly authorized agent of any of them, under and in accordance with such rules and regulations as the Commissioner of Customs shall prescribe with the approval of the department head.
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TITLE II
ADMINISTRATIVE PROVISIONS 
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PART 1
BASES OF ASSESSMENT OF DUTY 
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Sec. 201. Basis of Dutiable Value. — Whenever an imported article is subject to an ad valorem rate of duty, the duty shall be assessed upon the market value or price at which, at the time of exportation, the same, like or similar article is freely offered for sale in the principal markets of the exporting country for exportation to the Philippines, in the usual wholesale quantities and in the ordinary course of trade (excluding internal excise taxes to be remitted or rebated), plus ordinary expenses prior and incidental to the lading of such article on board the vessel or aircraft at the port of export (including taxes or duties, if any) and freight paid as well as insurance premium paid covering the transportation of such article to the port of entry in the Philippines. 
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When the value of the article cannot be ascertained in accordance with the preceding paragraph, the value shall be the domestic wholesale market value or selling price of the same, like or similar imported article in the principal market of the Philippines on the date of exportation of the article under appraisement, in the usual wholesale quantities and in the ordinary course of trade, minus the import duty and other taxes as well as a commission not exceeding six per centum if any has been paid or contracted to be paid on goods secured otherwise than by purchase, and profits not to exceed eight per centum and a reasonable allowance for general expenses not to exceed eight per centum on purchased goods, and all other expenses incidental to the delivery from the port of importation to the principal market in the Philippines. 


Sec. 202. Bases of Dutiable Weight. — On articles that are subject to specific rate of duty, based on weight, the duty shall be ascertained as follows: 

a. When articles are dutiable by the gross weight, the dutiable weight thereof shall be the weight of same, together with the weight of all containers, packages, holders and packings, of any kind, in which said articles are contained, held or packed at the time of importation. 
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b. When articles are dutiable by the legal weight, the dutiable weight thereof shall be the weight of same, together with the weight of the immediate containers, holders and/or packing in which such articles are usually contained, held or packed at the time of importation and/or, when imported in retail packages, at the time of their sale to the public in usual retail quantities: Provided, That when articles are packed in single container, the weight of the latter shall be included in the legal weight. 
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c. When articles are dutiable by the net weight, the dutiable weight thereof shall be only the actual weight of the articles at the time of importation, excluding the weight of the immediate and all other containers, holders or packing in which such articles are contained, held or packed. 
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d. Articles affixed to cardboard, cards, paper, wood or similar common material shall be dutiable together with the weight of such holders. 
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e. When a single package contains imported articles dutiable according to different weights, or to weight and value, the common exterior receptacles shall be prorated and the different proportions thereof treated in accordance with the provisions of this Code as to the dutiability or non-dutiability of such packing. 
Sec. 203. General Rules of Classification. — The interpretation and application of the provisions of this Code relating to the classification of articles imported into the Philippines shall be governed by the following principles: 
RULE 1. The titles of schedules, chapters and subchapters are provided for ease of reference only; for legal purposes, classification shall be determined according to the terms of the headings or subheadings and any relative schedule or chapter notes and, provided such headings, subheadings or notes do not otherwise require, according to the succeeding rules.
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RULE 2. Any reference in a heading or subheading to a material or substance shall include a reference to mixtures or combinations of that material or substance with other materials or substances. Any reference to articles of a given material or substance shall include a reference to articles consisting wholly or partly of such material or substance. The classification of articles consisting of more than one material or substance shall be according to the principles of Rule 3. 
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RULE 3. When articles are, prima facie, classifiable under two or more headings or subheadings, classification shall be effected as follows: 
a. The heading or subheading which provides the most specific description shall be preferred to any other heading or subheading providing a more general description. 
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b. Mixtures and composite articles which consist of different materials or are made up of different components and which cannot be classified by reference to "a" shall be classified as if they consisted of the material or component which give the articles their essential character, insofar as this criterion is applicable. 
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c. When articles cannot be classified by reference to "a" or "b" they shall be classified under the heading or subheading which provides the highest rate of duty. 
RULE 4. Where in a note to a schedule or chapter it is provided that certain articles are not covered by that schedule or chapter a reference being made to another schedule or chapter or to a particular heading or subheading, the note shall, unless the context requires otherwise, refer to all the articles falling within that other schedule or chapter or heading or subheading notwithstanding that only certain of those articles are referred to by description in the note. 
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RULE 5. When dutiable and duty-free articles or those dutiable at different rates are packed together or mingled in such manner that the value of each class of such article cannot be readily determined by the officials of the Bureau of Customs, all such articles shall pay duty at the rate applicable to that article in the package which is subject to the highest rate of duty, unless the importer or consignee segregates such article at his own risk and on his account, under the supervision of customs officials, within fifteen days after the acceptance of import entry covering same, and before delivery, in order that the value of each article may be determined. 
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RULE 6. In classifying manufactured products, no account shall be taken of the following: 
a. Insignificant parts of composite goods, in particular such as are used solely for mounting or connecting separate parts (e.g., nails, rivets, screws, washers, gaskets, locks, clamps, eyelets, clasps, hinges, bolts, cornerpieces, bands, threads, strings, beltings, straps, ropes);  chanrobles virtual law library
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b. Negligible processing, refinement and decorations; 
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c. Manufacturers' marks or names or trade marks, indications of the country of origin of the types of articles, their sizes or capacities, calibration marks, indications of graduation and the like, not of an ornamental character. 
RULE 7. Unless otherwise provided for, unfinished and incomplete articles shall be classified as the finished and complete articles, provided their intended use is recognizable. 
RULE 8. Unless otherwise provided for, the separate parts and unassembled pieces of articles which normally consist of various component parts, shall be classified as complete articles, when imported together by the same importer, owner or consignee from the same seller or shipper on the same vessel or vehicle. The absence of certain non-essential parts does not affect the application of this provision. chanrobles virtual law library
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RULE 9. Accessories and spare parts shall be classified with the articles with which they are imported, when, by their character and quantity, they correspond to such articles and when they are usually sold together with them and are included in the price of such article. 
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RULE 10. Cases, boxes, caskets, sheaths and the like, of normal type (e.g., such as are used for cutlery, binoculars, microscopes, watches, musical instruments, weapons, sport goods) imported with the corresponding articles, shall be classified as such articles; if imported separately, they shall be classified under the corresponding heading or subheading of this Code. 
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RULE 11. No duties shall be assessed on account of the usual coverings or holdings of articles dutiable otherwise than ad valorem, nor those free of duty, except as in this Code expressly provided, but if there be used for covering or holding imported articles, whether dutiable or free, any unusual article, form or material adapted for use otherwise than in the bona fide preservation or transportation of such article to the Philippines, such covering or holding shall be classified under the corresponding heading or subheading of this Code.
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RULE 12. When the interior container or packing of any article dutiable by weight is of an unusual character, such container or packing shall be classified under the corresponding heading or subheading of this Code. 
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RULE 13. When an article falling within a heading or subheading is subject to ad valorem or specific rate of duty, it shall be subject to either the ad valorem or the specific rate of duty whichever is higher. 

RULE 14.Unless otherwise provided for, the term "used" or any provision indicating designation by use, for the purpose of classification and taxation of articles shall mean the chief or predominant use of such articles notwithstanding any fugitive or incidental use to which such articles may be subjected. chanrobles virtual law library

RULE 15. Articles not falling within any heading or subheading of this Code shall be classified under the heading or subheading appropriate to articles to which they are most akin. 
Sec. 204. Rate of Exchange. — For the assessment and collection of import duty upon imported articles and for other purposes, the value and prices thereof quoted in foreign currency shall be converted into the currency of the Philippines at the current rate of exchange or value specified or published, from time to time, by the Central Bank of the Philippines. 
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Sec. 205. Effective Date of Rates of Import Duty. — Imported articles shall be subject to the rate or rates of import duty existing at the time of entry, or withdrawal from warehouse in the Philippines, for consumption. 
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On and after the day when this Code shall go into effect all articles previously imported, for which no entry has been made, and all articles previously entered without payment of duty and under bond for warehousing, transportation, or any other purpose, for which no permit of delivery to the importer or his agent has been issued, shall be subject to the rates of duty imposed by this Code and to no other duty, upon the entry, or withdrawal thereof from warehouse, for consumption.

On articles abandoned or forfeited to, or seized by, the government, and then sold at public auction, the rate of duty and the tariff in force on the date of the auction shall apply: Provided, That duty based on the weight, volume and quantity of articles shall be levied and collected on the weight, volume and quantity at the time of their entry into the warehouse or the date of abandonment, forfeiture and/or seizure. 

Sec. 206. Entry, Withdrawal from Warehouse, for Consumption. — Imported articles shall be deemed "entered" in the Philippines for consumption when the specified entry form is properly filed and accepted, together with any related documents required by the provisions of this Code and/or regulations to be filed with such form at the time of entry, at the port or station by the customs official designated to receive such entry papers and any duties, taxes, fees and/or other lawful charges required to be paid at the time of making such entry have been paid or secured to be paid with the customs official designated to receive such monies, provided that the article has previously arrived within the limits of the port of entry.  chanrobles virtual law library
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Imported articles shall be deemed "withdrawn" from warehouse in the Philippines for consumption when the specified form is properly filed and accepted, together with any related documents required by any provisions of this Code and/or regulations to be filed with such form at the time of withdrawal, by the customs official designated to receive the withdrawal entry and any duties, taxes, fees and/or other lawful charges required to be paid at the time of withdrawal have been deposited with the customs official designated to receive such payment. 

Sec. 207. Revised Trade Agreement not Affected. — Nothing in this Code shall be construed to abrogate or in any manner impair or affect the provisions of the Revised Agreement concluded between the Philippines and the United States on September 6, 1955. 
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PART 2
SPECIAL DUTIES 
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Sec. 301. Dumping Duty. —   a. Whenever the Secretary of Finance (hereinafter called the Secretary") has reason to believe, from invoices or other papers or from information made available to him by any government agency or interested party, that a specific kind or class of foreign article, whether dutiable or duty-free, is being sold or is likely to be sold for exportation to, or in, the Philippines, at a price less than its fair value, as hereinafter defined, the importation or sale of which might injure, or prevent the establishment of, or is likely to injure an industry in the Philippines, he shall so advise the Tariff Commission (hereinafter called the "Commission"). 
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b. The Commission, upon receipt of such advice from the Secretary, shall conduct an investigation to — 
1. Verify if the kind or class of articles in question is being sold or is likely to be sold for exportation to, or in, the Philippines at a price less than its fair value;
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2. Determine if, as a result thereof, an industry in the Philippines is being injured or is likely to be injured or is prevented from being established by reason of the importation or sale of such kind or class of article into the Philippines; and 
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3. Ascertain the difference, if any, between the purchase price or, in the absence thereof, the exporter's sales price, and the fair value of the article. The Commission shall submit its findings to the Secretary within one month after receipt of the aforesaid advice. 
c. The Secretary shall, within fifteen days from the report of the Commission, decide whether the article in question is being imported in violation of this section and shall give due notice of such finding and shall direct the Commissioner of Customs to cause the dumping duty, to be levied, collected and paid, as prescribed in this section, in addition to any other duties, taxes and charges imposed by law on such article. 
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d. The "dumping duty" as provided for in subsection "e" hereof shall be equal to the difference between the purchase price or, in the absence thereof, the exporter's sales price, and the fair value of the article. 
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e. For the purpose of this section — 
1. The "fair value" of an article shall be its foreign market value, or, in the absence of such value, its cost of production. 
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2. The "purchase price" of an imported article shall be the price at which such article has been purchased or agreed to be purchased, prior to the time of exportation, by the person by whom or for whose account the article is imported, plus, when not included in such price — 
(a) The cost of all containers and coverings and all other costs, charges and expenses incident to placing the article in condition, packed ready for shipment to the Philippines; 
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(b) The amount of any export tax paid in the country of exportation on the exportation of the article to the Philippines; 
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(c) The amount of any import duties imposed by the country of exportation which have been rebated, or which have not been collected, by reason of the exportation of the article to the Philippines; and 
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(d) The amount of any taxes imposed in the country of exportation upon the manufacturer, producer or seller, in respect to the manufacture, production or sale of the article, which have been rebated, or which have not been collected, be reason of the exportation of the article of the Philippines.
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Any additional costs, charges and expenses incident to bringing the article from the place of shipment in the country of exportation to the place of delivery in the Philippines and Philippine customs duties imposed thereon shall not be included. chanrobles virtual law library
3. The "exporter's sale price" of an imported article shall be the price at which such article is sold or agreed to be sold in the Philippines, before or after the time of exportation, by or for the account of the exporter, including —
(a) The cost of all containers and coverings and all other costs, charges and expenses incident to placing the article in condition, packed ready for shipment to the Philippines; 
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(b) The amount of any import duties imposed by the country of exportation which have been rebated, or which have not been collected, by reason of the exportation of the article to the Philippines; and 
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(c) The amount of any taxes imposed in the country of exportation upon the manufacturer, producer or seller in respect to the manufacture, production or sale of the article, which have been rebated, or which have not been collected, by reason of its exportation to the Philippines. The following amount, if included, shall be deducted — 
(1) The amount of costs, charges and expenses, and Philippine customs duties, incident to bringing the article from the place of shipment in the country of exportation to the place of delivery in the Philippines; 
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(2) The amount of commissions, if any, for selling in the Philippines the particular article under consideration; 
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(3)An amount equal to the expenses, if any, generally incurred by or for the account of the exporter in the Philippines in selling identical or substantially identical article; and 
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(4) The amount of any export tax paid in the country of exportation on the exportation of the article to the Philippines. 
4. The "foreign market value" of an imported article shall be the price, at the time of exportation of such article to the Philippines, at which such or similar article is sold or freely offered for sale to all purchasers in the principal markets of the country from which exported, in the usual wholesale quantities and in the ordinary course of trade for home consumption (or, if not sold or offered for sale for home consumption, then for exportation to countries other than the Philippines), including the cost of all containers and coverings and all other costs, charges and expenses incident to placing the article in condition packed ready for shipment to the Philippines, except that in the case of articles purchased or agreed to be purchased by the person by whom or for whose account the article is imported, prior to the time of exportation, the foreign market value shall be ascertained as of the date of such purchase or agreement to purchase. In the ascertainment of foreign market value for the purpose of this section, no pretended sale or offer for sale, and no sale or offer for sale intended to establish a fictitious market, shall be taken into account. 
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5. The "cost of production" of an imported article shall be the sum of — 
(a) The cost of materials of, and of fabrication, manipulation or other process employed in manufacturing or producing, identical or substantially identical article, at a time preceding the date of shipment of the particular article under consideration which would ordinarily permit the manufacture or production of the particular article under consideration in the usual course of business; 
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(b) The usual general expenses not less than 10 per cent of such cost, in the case of identical or substantially identical articles; 
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(c) The cost of all containers and coverings, and all other costs, charges and expenses incident to placing the particular article under consideration in condition, packed ready for shipment to the Philippines; and 
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(d) An addition for profit not less than 8 per cent of the sum of the amounts determined under subparagraphs (a) and (b) hereof, equal to the profit which is originally added, in the case of articles of the same general character as the particular article under consideration, by manufacturers or producers in the country of manufacture or production who are engaged in the same general trade as the manufacturer or producer of the particular article under consideration. 
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f. For the purposes of this section the "exporter" of an imported article shall be the person by whom or for whose account the article is imported into the Philippines — 
1. If such person is the agent or principal of the exporter, manufacturer or producer; or 
2. If such person owns or controls, directly or indirectly, through stock ownership or control or otherwise, any interest in the business of the exporter, manufacturer or producer; or 
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3. If the exporter, manufacturer or producer owns or controls, directly or indirectly, through stock ownership or control or otherwise, any interest in any business conducted by such persons; or 
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4. If any person or persons, jointly or severally, directly or indirectly, through stock ownership or control or otherwise, own or control in the aggregate 20 per cent or more of the voting power or control in the business carried on by the person by whom or for whose account the article is imported into the Philippines, and also 20 per cent or more of such power or control in the business of the exporter, manufacturer or producer. 
g. Pending investigation and final decision of the case, the article in question, and articles of the same specific kind or class subsequently imported under similar circumstances, shall be released to the owner, importer, consignee or agent upon the giving of a bond in an amount equal to the double the estimated value thereof. Articles which may have been delivered under the provision of section fifteen hundred and three of this Code prior to the institution of the investigation provided in this section shall, pending final decision, be ordered returned to the custody of the collectors of customs unless released under bond in accordance with this section. 
h. Any aggrieved party may only appeal the amount of dumping duty that is levied and collected by the Commissioner of Customs to the Court of Tax Appeals in the same manner and within the same period provided for by law in the case of appeals from decisions of the Commissioner of Customs. 
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i. (1) The article, if it has not been previously released under bond as provided in subsection "g" hereof, shall be released after payment by the party concerned of the corresponding dumping duty in addition to any other duties, taxes and charges, if any, or re-exported by the owner, importer, consignee or agent, at his option and expense, upon the filing of a bond in an amount equal to double the estimated value of the article, conditioned upon the presentation of a landing certificate issued by a consular officer of the Philippines at the country of destination; or 
(2) If the article has been previously released under bond, as provided in subsection "g" hereof, the party concerned shall be required to pay the corresponding dumping done in addition to any other duties, taxes and charges, if any.  chanrobles virtual law library
j. Any investigation to be conducted by the Commission under this section shall include a hearing or hearings where the owner, importer, consignee or agent of the imported article, the local producers of a like article, other parties directly affected, and such other parties as in the judgment of the Commission are entitled to appear, shall be given an opportunity to be heard and to present evidence bearing on the subject matter. 
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k. It shall be the duty of collectors of customs at all ports of entry to levy and collect the dumping duty in accordance with subsection "d" hereof on the specific kind or class of article as to which the Secretary has made a decision of dumping. 
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It shall also be their duty to bring to the attention of the Secretary, thru the Commissioner of Customs, any case coming within their notice which may, in their opinion, require action as provided in this section.
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l. The Secretary shall promulgate all rules and regulations necessary to carry out the provisions of this section. 
Sec. 302. Countervailing Duty. —   a. On articles dutiable under this Code, upon the production, manufacture or export of which any bounty, subsidy or subvention is directly or indirectly granted in the country of origin and/or exportation, and the importation of which has been determined by the Secretary, after investigation and report of the Commission, as likely to materially injure an established industry, or prevent or considerably retard the establishment of an industry in the Philippines, there shall be levied a countervailing duty equal to the ascertained or estimated amount of such bounty, subsidy or subvention: Provided, That the exception of any exported article from a duty or tax imposed on like articles when destined for consumption in the country of origin and/or exportation or the refunding of such duty or tax, shall not be deemed to constitute a grant of a bounty, subsidy or subvention within the meaning of this section; however, should an article be allowed drawback by the country of origin and/or exportation, only the ascertained or estimated excess of the amount of the drawback over the total amount of the duties and/or internal taxes, if any, shall constitute a bounty, subsidy or subvention. 
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b. The Commission, on its own motion or upon application of any interested party, when in its judgment there is good and sufficient reason therefor, shall ascertain, determine or estimate the net amount of such bounty, subsidy or subvention and shall transmit to the Secretary the amounts so ascertained, determined or estimated, if any. Wherever it is ascertained that the conditions which necessitated the imposition of the countervailing duty have ceased to exist, and the Commission shall so certify to the Secretary, the latter shall take the necessary steps to suspend or discontinue the imposition of such duty. 

c. The Secretary shall make all rules and regulations necessary to carry out the provisions of this section. 
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Sec. 303. Marking of Imported Articles and Containers. —   a. Marking of Articles. — Except as hereinafter provided, every article of foreign origin (or its container, as provided in subsection "b" hereof) imported into the Philippines shall be marked in any official language of the Philippines and in a conspicuous place as legibly, indelibly and permanently as the nature of the article (or container) will permit in such manner as to indicate to an ultimate purchaser in the Philippines the name of the country of origin of the article. The Commissioner of Customs shall, with the approval of the department head, issue rules and regulations to — 
(1) Determine the character of words and phrases or abbreviations thereof which shall be acceptable as indicating the country of origin and prescribe any reasonable method of marking, whether by printing, stenciling, stamping, branding, labeling or by any other reasonable method, and a conspicuous place on the article or container where the marking shall appear; 
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(2) Require the addition of any other words or symbols which may be appropriate to prevent deception or mistake as to the origin of the article or as to the origin of any other article with which such imported article is usually combined subsequent to importation but before delivery to an ultimate purchaser; and 
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(3) Authorize the exception of any article from the requirements of marking if — 
(a) Such article is incapable of being marked; 
(b) Such article cannot be marked prior to shipment to the Philippines without injury; 
(c) Such article cannot be marked prior to shipment to the Philippines, except at an expense economically prohibitive of its importation; 
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(d) The marking of a container of such article will reasonably indicate the origin of such article; 
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(e) Such article is a crude substance; 
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(f) Such article is imported for use by the importer and not intended for sale in its imported or any other form; 
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(g) Such article is to be processed in the Philippines by the importer or for his account otherwise than for the purpose of concealing the origin of such article and in such manner that any mark contemplated by this section would necessarily be obliterated, destroyed or permanently concealed; 
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(h) An ultimate purchaser, by reason of the character of such article or by reason of the circumstance of its importation, must necessarily know the country of origin of such article even though it is not marked to indicate its origin; 
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(i) Such article was produced more than twenty years prior to its importation into the Philippines; or
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(j) Such article cannot be marked after importation except at an expense which is economically prohibitive, and the failure to mark the article before importation was not due to any purpose of the importer, producer, seller or shipper to avoid compliance with this section. 
b. Marking of Containers. — Whenever an article is excepted under subdivision (3) of subsection "a" of this section from the requirements of marking, the immediate container, if any, of such article, or such other container or containers of such article as may be prescribed by the Commissioner of Customs with the approval of the department head, shall be marked in such manner as to indicate to an ultimate purchaser in the Philippines the name of the country of origin of such article in any official language of the Philippines, subject to all provisions of this section, including the same exceptions as are applicable to articles under subdivision (3) of subsection "a". 
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c. Marking Duty for Failure to Mark. — If at the time of importation any article (or its container, as provided in subsection "b" hereof), is not marked in accordance with the requirements of this section, there shall be levied, collected and paid upon such article a marking duty of 5 per cent ad valorem, which shall be deemed to have accrued at the time of importation, except when such article is exported or destroyed under customs supervision and prior to the final liquidation of the corresponding entry.  chanrobles virtual law library
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d. Delivery Withheld until Marked. — No imported article held in customs custody for inspection, examination or appraisement shall be delivered until such articles and/or their containers, whether released or not from customs custody, shall have been marked in accordance with the requirements of this section and until the amount of duty estimated to be payable under subsection "c" of this section shall have been deposited. Nothing in this section shall be construed as excepting any article or its container from the particular requirements of marking provided for in any provisions of law. 
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e. The failure or refusal of the owner or importer to mark the articles as herein required within a period of thirty days after due notice shall constitute as an act of abandonment of said articles and their disposition shall be governed by the provisions of this Code relative to abandonment of imported articles. 
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Sec. 304. Discrimination by Foreign Countries. —   a. The President, when he finds that the public interest will be served thereby, shall by proclamation specify and declare new or additional duties in an amount not exceeding 50 per cent of the existing rates as hereinafter provided upon articles wholly or in part the growth or product of, or imported in a vessel of, any foreign country whenever he shall find as a fact that such country — 
(1) Imposes, directly or indirectly, upon the disposition in, or transportation in transit through or re-exportation from such country of any article wholly or in part the growth or product of the Philippines any unreasonable charge, exaction, regulation or limitation which is not equally enforced upon the like articles of every foreign country; or 
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(2) Discriminates in fact against the commerce of the Philippines, directly or indirectly, by law or administrative regulation or practice, by or in respect to any customs, tonnage, or port duty, fee, charge, exaction, classification, regulation, condition, restriction or prohibition, in such manner as to place the commerce of the Philippines at a disadvantage compared with the commerce of any foreign country. 
b. If at any time the President shall find it to be a fact that any foreign country has not only discriminated against the commerce of the Philippines, as aforesaid but has, after the issuance of a proclamation as authorized in subsection "a" of this section, maintained or increased its said discriminations against the commerce of the Philippines, the President is hereby authorized, if he deems it consistent with the interests of the Philippines, to issue a further proclamation directing that such product of said country or such articles imported in its vessels as he shall deem consistent with the public interests, shall be excluded from importation into the Philippines. 
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c. Any proclamation issued by the President under the authority of this section shall, if he deems it consistent with the interests of the Philippines, extend to the whole of any foreign country or may be confined to any subdivision or subdivisions thereof; and the President shall, whenever he deems the public interests require, suspend, revoke, supplement or amend any such proclamation. 
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d. All articles imported contrary to the provisions of this section shall be forfeited to the Government of the Philippines and shall be liable to be seized, prosecuted and condemned in like manner and under the same regulations, restrictions and provisions as may from time to time be established for the recovery, collection, distribution and remission of forfeiture to the government by the tariff and customs laws. Whenever the provision of this section shall be applicable to importations into the Philippines of articles wholly or in part the growth or product of any foreign country, they shall be applicable thereto whether such articles are imported directly or indirectly.
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e. It shall be the duty of the Commission to ascertain and at all times to be informed whether any of the discriminations against the commerce of the Philippines enumerated in subsections "a" and "b" of this section are practiced by any country; and if and when such discriminatory acts are disclosed, it shall be the duty of the Commission to bring the matter to the attention of the President, together with recommendation. 
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f. The Secretary shall make such rules and regulations as are necessary for the execution of such proclamation as the President may issue in accordance with the provisions of this section. 
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g. The authority granted herein to the President shall be exercised only when Congress is not in session. 
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PART 3
FLEXIBLE TARIFF 
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Sec. 401. Flexible Clause. —  a. The President, upon investigation by the Commission and recommendation of the National Economic Council, is hereby empowered to reduce by not more than fifty per cent or to increase by not more than five times the rates of import duty expressly fixed by statute (including any necessary change in classification) when in his judgment such modification in the rates of import duty is necessary in the interest of national economy, general welfare and/or national defense.  chanrobles virtual law library
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b. Before any recommendation is submitted to the President by the Council pursuant to the provisions of this section, the Commission shall conduct an investigation in the course of which it shall hold public hearings wherein interested parties shall be afforded reasonable opportunity to be present, to produce evidence and to be heard. The Commission may also request the views and recommendations of any government office, agency or instrumentality, and such office, agency or instrumentality shall cooperate fully with the Commission. 

c. The President shall have no authority to transfer articles from the duty-free list to the dutiable list nor from the dutiable list to the duty-free list of the tariff. 

d. The power of the President to increase or decrease rates of import duty within the limits fixed in subsection "a" shall include the authority to modify the form of duty. In modifying the form of duty the corresponding ad valorem or specific equivalents of the duty with respect to imports from the principal concerning foreign country for the most recent representation period shall be used as basis. 

e. The Commissioner of Customs shall regularly furnish to the Commission a copy each of all customs import entries containing every pertinent information appearing in the collectors' liquidated duplicates, including the consular invoice and/or the commercial invoice. The Commission or its duly authorized agents shall have access to and the right to copy all the customs import entries and other documents appended thereto as finally in the General Auditing Office. 

f. The Commission is authorized to adopt such reasonable procedure, rules and regulations as it may deem necessary to carry out the provisions of this section. 

g. Any order issued by the President pursuant to the provisions of this section shall take effect thirty days after its issuance. 

h. The provisions of this section shall not apply to any article the importation of which into the Philippines is or may be governed by Section 402 of this Code. 

i. The authority herein granted to the President shall be exercised only when Congress is not in session. 

Sec. 402. Promotion of Foreign Trade. —   a. For the purpose of expanding foreign markets for Philippine products as a means of assisting in the economic development of the country, in overcoming domestic unemployment, in increasing the purchasing power of the Philippine peso, and in establishing and maintaining better relationship between the Philippines and other countries, the President, upon investigation by the Commission and recommendation of the National Economic Council, is authorized from time to time: 

(1) To enter into trade agreements with foreign governments or instrumentalities thereof; and 
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(2) To modify import duties (including any necessary change in classification) and other import restrictions, as are required or appropriate to carry out and promote foreign trade with other countries: Provided, however, That in modifying import duties no increase shall exceed by five times or the decrease be more than fifty per cent of the rate of duty expressly fixed by this Code. 
b. The proclaimed duties and other import restrictions shall apply to articles the growth, produce or manufacture of all foreign countries, whether imported directly or indirectly: Provided, That the President may suspend the application of any concession to articles the growth, produce or manufacture of any country because of its discriminatory treatment of Philippine commerce or because of other acts (including the operations of international cartels) or policies which in his opinion tend to defeat the purposes set in this section; and the proclaimed duties and other import restrictions shall be in force and effect from and after such time as is specified in the proclamation. The President may at any time terminate any such proclamation in whole or in part. 
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c. Every trade agreement concluded pursuant to this section shall be subject to termination upon due notice to the foreign government concerned at the end of not more than five years from the date on which the agreement comes into force and, if not then terminated, shall be subject to termination thereafter upon not more than six months' notice. 
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d. The authority of the President to enter into trade agreements under this section shall terminate on the expiration of five years from the date of enactment of this Code: Provided, That trade agreements concluded pursuant to the provisions of this section and subsisting as of the date of the expiration of this authority shall remain in force for the period fixed in the agreement in and may not be extended but he may be sooner terminated in accordance with the preceding subsection. 
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e. Nothing in this section shall be construed to give any authority to cancel or reduce in any manner any of the indebtedness of any foreign country to the Philippines or any claim of the Philippines against any foreign country. 
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f. Before any trade agreement is conducted with any foreign government or instrumentality thereof, reasonable public notice of the intention to negotiate an agreement with such a government or instrumentality shall be given in order that any interested person may have an opportunity to present his views to the Commission which shall seek information and advice from the Department of Agriculture and Natural Resources, the Department of Commerce and Industry, the Central Bank of the Philippines and from such other sources as it may deem appropriate.  chan robles virtual

g. (1) The Commission, upon its own motion, or in pursuance of a request of the President or a resolution of either house of Congress, or upon application of any interested party when in the judgment of the Commission there is good and sufficient reason therefor, shall conduct an investigation to determine whether any product, as a result of any concession granted under a trade agreement, is being imported into the Philippines in such increased quantities as to cause or threaten serious injury to the domestic industry producing like or directly competitive products. The Commission shall render a report thereof to the President, through the National Economic Council, within three months after the motion, request, resolution or application was received.

  
Should the Commission find that the representations made in accordance with the preceding paragraph are justified, it shall recommend to the President, through the National Economic Council the withdrawal or modification of the concession, its suspension in whole or in part, or the establishment of import quota which shall not be less than ten per centum or more than one hundred per centum of the average annual quantity imported or, in the absence thereof, the average annual value of such importation, during the three calendar years immediately preceding the date such quota is fixed, to the extent and for the time necessary to prevent or remedy such injury. 

2) Upon receipt of the report of the findings and recommendation of the Commission, the President may prescribe such adjustments in the rates of import duties, or such other modifications as are recommended by the Commission to be necessary to prevent or remedy serious injury to the respective domestic industry. 

h. Nothing in this section shall be construed to preclude giving effect to any executive agreement or any future preferential trade agreement with the United States, or to extend to any other country the preferential treatment accorded by the Philippines to the products of the United States of America.

i. The Commission is authorized to adopt such reasonable procedure, rules and regulations as it may deem necessary to execute its functions under this section. 
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PART 4
TARIFF COMMISSION


Sec. 501. Chief Officials of the Tariff Commission. — The Tariff Commission shall be under a chief and assistant chief to be known as Commissioner and Assistant Commissioner, and who shall be appointed by the President with the consent of the Commission on Appointments. They shall hold office during good behavior unless sooner removed in accordance with law. 

The Commissioner and Assistant Commissioner shall each receive twelve thousand and ten thousand pesos, per annum, respectively. 

Sec. 502. Qualifications. — No person shall be eligible for appointment as Commissioner and as Assistant Commissioner unless he is a natural-born citizen of the Philippines and who by experience and academic training is possessed of qualifications requisite for developing expert knowledge of tariff problems. They shall not, during their tenure in office, engage in the practice of any profession, or intervene directly or indirectly in the management or control of any private enterprise which may, in any way, be affected by the functions of his office; nor shall he, directly or indirectly, be financially interested in any contract with the Government, or any subdivision or instrumentality thereof. 
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Sec. 503. Appointment and Compensation of Officials and Employees. — All employees of the Commission shall be appointed by the Commissioner in accordance with the civil service law except a private secretary each to the Commissioner and the Assistant Commissioner. 
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The Commissioner shall adopt a salary schedule for the principal executive and technical personnel in accordance with the following rates, any provision of law to the contrary notwithstanding: 
1. Executive director P8,400.00 
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2. Technical assistants 7,200.00 
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3. Chiefs of division 7,200.00 
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4. Commodity specialists 6,600.00 
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5. Research economists, tariff researchers, cost accountants, and statisticians 6,000.00 

6. Librarian-researcher 4,800.00  chanrobles virtual law library

7. Junior commodity specialists, junior research economists, junior tariff researchers, junior cost accountants, and junior statisticians 3,600.00 
Sec. 504. Official Seal. — The Commission is authorized to adopt an official seal. 
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Sec. 505. Functions of the Commission. — The Commission shall investigate —   (a) the administration of and the fiscal and industrial effects of the tariff and customs laws of this country now in force or which may hereafter be enacted; 
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(b) the relations between the rates of duty on raw materials and the finished or partly finished products; 

(c) the effects of ad valorem and specific duties and of compound specific and ad valorem duties; 

(d) all questions relative to the arrangement of schedules and classification of articles in the several schedules of the tariff law; 

(e) the tariff relations between the Philippines and foreign countries, commercial treaties, preferential provisions, economic alliances, the effect of export bounties and preferential transportation rates; 

(f) the volume of importations compared with domestic production and consumption; 

(g) conditions, causes, and effects relating to competition of foreign industries with those of the Philippines, including dumping and cost of production; and 

(h) in general, to investigate the operation of customs and tariff laws, including their relation to the national revenues, their effect upon the industries and labor of the country, and to submit reports of its investigations as hereinafter provided. 

Sec. 506. Assistance to the President and Congress. — In order that the President and the Congress may secure information and assistance, it shall be the duty of the Commission to — 

(a) Ascertain conversion costs and costs of production in the principal growing, producing or manufacturing centers of the Philippines, whenever practicable;
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(b) Ascertain conversion costs and costs of production in the principal growing, producing or manufacturing centers of foreign countries of articles imported into the Philippines whenever such conversion costs or costs of production are necessary for comparison with those in the Philippines;  chanrobles virtual law library
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(c) Select and describe representative articles imported into the Philippines similar to or comparable with those locally produced; select and describe articles of the Philippines similar to or comparable with such imported articles; and obtain and the samples of articles so selected, whenever advisable; 
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(d) Ascertain import costs of such representative articles so selected; 
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(e) Ascertain the grower's, producer's or manufacturer's selling prices in the principal growing, producing or manufacturing centers of the Philippines of the articles of the Philippines so selected; and 

(f) Ascertain all other facts which will show the differences in or which affect competition between articles of the Philippines and those imported in the principal markets of the Philippines. 
Sec. 507. Reports of the Commission. — The Commission shall place at the disposal of the President any member of the Congress of the Philippines or each member thereof all information at its command; shall make such investigation and report as may be required by the President and the Congress of the Philippines and shall report to the President and Congress on the first Monday of December of each year hereafter a statement of methods adopted and a summary of all reports made during the year. 
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Sec. 508. Access to Documents. — The Commission or its duly authorized representative shall have access to any document, paper or record, pertinent to the subject matter under investigation, in the possession of any person, firm, co-partnership, corporation or association engaged in the production, importation or distribution of any article under investigation, and shall have power to summon witnesses, take testimony, administer oaths, and to issue subpoena duces tecum requiring the production or books, papers or documents relating to the matter under investigation. 
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Sec. 509. Sworn Statements. — The Commission may order the taking of sworn statements at any stage of any proceeding or investigation before it. Such sworn statements may be taken before any person having power to administer oaths. 
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Sec. 510. Verified Statements. — The Commission is authorized to require any importer, grower, producer, manufacturer or seller to file with the Commission a statement, under oath, giving his selling prices in the Philippines of any article imported, grown, produced, fabricated or manufactured by him. 
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Sec. 511. Rules and Regulations of the Commission. — The Commission shall adopt and promulgate such rules and regulations as may be necessary to carry out the provisions of this Code.  chanrobles virtual law library
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Sec. 512. Appropriation. — The amount of three hundred thousand pesos is hereby appropriated to carry out the purpose of Part 4, Title II, Book I of this Code. Subsequent appropriations shall be provided for in the succeeding General Appropriation Act. 
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Sec. 513. Transitory Provision. — Upon the effectivity of this Code the personnel, funds, equipment, property and appropriations of the Tariff Division under the Department of Finance are hereby transferred to the Tariff Commission under this Code.