Sec. 1149 (r-jay Zabate).docx

The seized or forfeited goods that the government confiscated upon entering the Philippines can be subject to public auction held by the Bureau of Customs. The price of the goods cannot be less than its landed cost.

When the goods are remain unsold for at least two (2) days in a public auction, it will be donated or surrendered to another government agencies or declared for official use of the Bureau. This usually happens when the auction has a lack of bidders or the goods has a lack of an acceptable bid.

After the unsold goods are declared to the government, they will officially use it as a part of the organization and if it’s not capable for government use or donation, the goods will be subject for re-exportation also called as entrepot trade. This happens when one member of a free trade agreement charges lower tariffs to external nations to win trade, and then re-exports the same product to another partner in the trade agreement, but tariff-free. Re-exportation are used to avoid sanctions by other nations. The goods can also be subject for negotiated sale where it usually only involves a limited number of potential buyers and often includes one interested party with a high probability to close the transaction. The benefits of a negotiated sale are confidential, efficiency, and the speed of the sales process.

The negotiated sale can be confidential but it must follow certain procedures in the negotiation such as filing an approval of the Secretary of the Finance, Mr. Carlos Dominguez II and then the presence of a representative of the Commission on Audit are required in the negotiation process.

In case of donating an unsold goods from the auction, the unsold goods suitable for shelter and foodstuffs such as clothing materials, can goods and medicines are donated to the Department of Social Welfare and Development, a government agency that is responsible for the protection of the social welfare of rights of Filipinos and to promote social development. The unsold materials are in the good hands of the DSWD because they will use it to help sustain the health of the Filipinos especially the indigent people living in the country.

Customs urged to donate 30K bags of seized rice to DSWD December 26, 2018, 5:39 pm Share MANILA -- Finance Secretary Carlos Dominguez III has ordered newly-installed Bureau of Customs (BOC) Commissioner Rey Leonardo Guerrero to make a fresh donation of 30,000 bags of undocumented rice shipments to the Department of Social Welfare and Development (DSWD) to aid in the government’s anti-poverty and disaster relief programs. In a news release this week, the Department of Finance (DOF) said Dominguez gave the order to Guerrero after the new Customs commissioner reported that the bureau intercepted the shipment after being tagged in Zamboanga City as undocumented imported rice. “Donate that to the DSWD. They can use that,” Dominguez told Guerrero, who attended his first Executive Committee meeting at the DOF last Nov. 5. The 30,000 bags of rice for donation to the DSWD are on top of the 16,000 bags earlier turned over by the BOC under then-commissioner Isidro Lapeña to augment disaster relief efforts for typhoon victims, also on Dominguez’s orders. About 9,000 bags of rice seized in the Port of Cebu were turned over by the BOC to the DSWD on Sept.14 Another 6,921 bags in the Port of Zamboanga and 748 bags in the custody of the bureau’s Enforcement and Security Service (ESS) were also donated to the DSWD on Sept. 19 and 24, respectively. The BOC said it also donated to the DSWD 5,040 pieces of canned goods, 109 packages of emergency survival blankets, 350 boxes of bed sheets, blankets and towels, 1,332 boxes of brand-new clothes, and 153 packages of face masks from the Manila International Container Port (MICP) last Sept. 21. According to a BOC report to Dominguez, the Bureau will also donate used clothing of various volumes seized from the ports of San Fernando in La Union, Manila, MICP, Legazpi City, Cebu, Cagayan de Oro, Davao, and Subic. Earlier, Dominguez directed the BOC to immediately release smuggled rice and other food items seized by the agency to the DSWD to augment ongoing government preparations before Typhoon Ompong struck Northern Luzon. According to the Finance chief, “government-to-government transfers in emergency situations can be legally fast-tracked” as in the case of the BOC release of the seized food stocks to the DSWD for disaster relief. Under Chapter 10, Section 1141 of the Customs Modernization and Tariff Act (CMTA), goods under BOC custody that are up for disposal “may be donated to another government agency or declared for official use by the Bureau, after approval of the Secretary of Finance, or sold at a public auction within 30 days after a 10-day notice posted at a public place at the port where the goods are located and published electronically or in a newspaper of general circulation.” Also, goods suitable for shelter, food items, clothing materials and medicines “may be donated to the DSWD,” the law further states. (PR)

Dominguez orders BOC to release seized rice, other foodstuff to DSWD to augment gov’t disaster reduction efforts 14/09/18

Finance Secretary Carlos Dominguez III has ordered the Bureau of Customs (BOC) to immediately release smuggled rice and other food items seized by the agency to the Department of Social Welfare and Development (DSWD) to augment ongoing government preparations for the possible onslaught of typhoon “Ompong” in Northern Luzon and other areas this week. “Please release all seized rice and foodstuff in your possession to the DSWD for possible disaster relief,” Dominguez told BOC Commissioner Isidro Lapeña. Dominguez’s directive was in response to President Duterte’s order to all government agencies to ensure the highest level of readiness for the typhoon. According to the Finance chief, “government-to-government transfers in emergency situations can be legally fast-tracked” as in the case of the BOC release of the seized food stocks to the DSWD for disaster relief. Under Chapter 10, Section 1141 of the Customs Modernization and Tariff Act (CMTA), goods under BOC custody that are up for disposal “may be donated to another government agency or declared for official use by the Bureau, after approval of the Secretary of Finance, or sold at a public auction within 30 days after a 10-day notice posted at a public place at the port where the goods are located and published electronically or in a newspaper of general circulation.” Goods suitable for shelter, food items, clothing materials and medicines “may be donated to the DSWD,” the CMTA states. Dominguez was present during a command conference led by the President Thursday afternoon at Camp Aguinaldo to discuss ongoing preparations for the possible disastrous impact of “Ompong,” which could possibly reach supertyphoon status. The latest weather forecasts as of press time expect Ompong to slam into the northern province of Cagayan Saturday morning and is expected to bring heavy rains within its 900-kilometer radius. Earlier, Dominguez instructed the BOC to coordinate with the DSWD on the distribution of confiscated rice stocks to flood victims and the poorest municipalities in the country, in response to a proposal of Quirino Rep. Dakila Carlo Cua. Lapeña reported during a recent Department of Finance (DOF) Executive Committee (Execom) meeting that the BOC seized in July some 100 containers with 50,000 sacks of rice worth P125 million at the Manila International Container Port (MICP). The shipment from Thailand was consigned to the Sta. Rosa Farm Products Corp. but without the necessary import permits, Lapeña said. Cua had earlier proposed that smuggled rice be donated to families affected by the recent typhoons. The lawmaker said during the hearing that rather than auction off the stocks, which could possibly end up in the hands of smugglers who use dummies to buy these back, it would be better for the BOC to just donate them to flood victims. Dominguez had also directed the BOC to keep a closer watch on the entry of “hot” stocks of rice and sugar. Following Dominguez’s directive, the BOC started discussing with the Armed Forces of the Philippines (AFP) and the Philippine Coast Guard (PCG) plans to team up with these law enforcement agencies in the anti-smuggling drive. Lapeña also proposed the establishment of a data-sharing system between the BOC and the Bureau of Internal Revenue (BIR) to plug revenue leakages and help pinpoint and prosecute smugglers and tax evaders.

DOF orders donation of smuggled food items to DSWD Published September 14, 2018, 5:29 PM By Chino Leyco

Finance Secretary Carlos G. Dominguez III ordered the immediate release of smuggled rice and other food items in the Bureau of Customs warehouses to augment the ongoing preparations for relief operations. Ahead of the expected landfall of typhoon “Ompong” in Cagayan, Dominguez directed Customs Commissioner Isidro S. Lapeña to release all smuggled rice and other food items to the Department of Social Welfare and Development (DSWD). “Please release all seized rice and foodstuff in your possession to the DSWD for possible disaster relief,” Dominguez said in a mobile phone message sent to Lapeña, which the finance chief later on shared to finance reporters. Dominguez’s directive was in response to President Rodrigo R. Duterte’s order to all government agencies to ensure the highest level of readiness for the typhoon. The finance chief said that “government-to-government transfers in emergency situations can be legally fast-tracked” as in the case of the Customs release of the seized food stocks to the DSWD for disaster relief. Under Chapter 10, Section 1141 of the Customs Modernization and Tariff Act (CMTA), goods under Customs custody that are up for disposal “may be donated to another government agency or declared for official use by the Bureau, after approval of the Secretary of Finance.” Goods suitable for shelter, food items, clothing materials, and medicines “may be donated to the DSWD,” the CMTA stated. Dominguez was present during a command conference led by the President Thursday afternoon at Camp Aguinaldo to discuss ongoing preparations for the possible disastrous impact of “Ompong,” which could possibly reach super typhoon status. Earlier, Dominguez instructed the Customs to coordinate with the DSWD on the distribution of confiscated rice stocks to flood victims and the poorest municipalities in the country, in response to a proposal of Quirino Rep. Dakila Carlo Cua. Lapeña reported during a recent Department of Finance (DOF) Executive Committee (Execom) meeting that the Customs seized in July some 100 containers with 50,000 sacks of rice worth P125 million at the Manila International Container Port (MICP). The shipment from Thailand was consigned to the Sta. Rosa Farm Products Corp. but without the necessary import permits, Lapeña said. Finance Undersecretary Karl Kendrick T. Chua earlier said Cua had followed up on his proposal on the donation of the seized rice stocks during a roundtable discussion last month organized by the panel to discuss the status of the social mitigation programs under the first tax reform law. Cua had earlier proposed that smuggled rice be donated to families affected by the recent typhoons. The lawmaker said during the hearing that rather than auction off the stocks, which could possibly end up in the hands of smugglers who use dummies to buy these back, it would be better for the Customs to just donate them to flood victims.

Why Customs can't sell smuggled rice to NFA By Kathlyn dela Cruz, ABS-CBNnews.com Posted at Jul 10 2013 04:54 PM | Updated as of Jul 11 2013 12:54 AM

MANILA - Bureau of Customs (BOC) Commissioner Ruffy Biazon on Wednesday explained why the agency cannot just sell seized smuggled rice to the National Food Authority (NFA). Speaking with radio dzMM Wednesday morning, Biazon said the BOC needs to strictly follow the Tariff and Customs Code regarding the disposal of forfeited goods. He said they would need to conduct an auction where the seized smuggled rice would be sold to the highest bidder. Only after two failed bidding procedures would the NFA be allowed to buy the rice. "Kung magkaroon ng dalawa na failed bidding, saka lang namin pwede i-konsidera 'yung paggamit ng produkto ng mga government agencies o kaya donation or negotiated sale," Biazon said. He also pointed out the conflict between the interests of the NFA and the BOC, which is a revenue-collecting agency. "Ang Customs ang mandato namin magbenta sa pinakamataas na halagang kaya naming ibenta. Ang NFA naman bilang isang government agency...hangga't maaari 'yung pinakamababang halaga. So may conflict dun," he said. Biazon's statements came amid the NFA's request that the thousands of sacks of rice seized at the Port of Legazpi, Bicol September last year be sold to them instead. The seized goods remain unsold after it was bid at a floor price of only P939 per sack, which is lower than NFA's standard retail price of around P1,200 per sack. While noting that the NFA was the one that assigned the floor price, Biazon also noted that the NFA's proposed price--if it would buy the rice--was only half of the minimum bid price. "As far as revenues are concerned, hindi bentahe sa amin iyun," he said.

Why NFA wants to buy smuggled rice Biazon said the NFA cited two reasons why they sought to buy the rice, one of which is the need to control the entry of goods to the market. "Kasi po ibebenta sa mga commercial buyers at ang pangamba nila maapektuhan 'yung kanilang plano sa pagdistribute sa merkado." He added, "Second, baka daw ang bibili rin lang 'yung mga nagparating o nag-smuggle." Biazon said he will now formalize his request to proceed with the auction, noting that the rice has already "deteriorated," given that it has been kept there for 9 months now. "Baka malugi pa ang gobyerno. Ang worse niyan pag tuluyan pang nasira, Customs na naman ang masisisi," he said.

BoC seizure of vessel questioned BY WILLIAM DEPASUPIL, TMT MAY 01, 2017

THE legality of the Bureau of Customs’ (BoC) recent seizure and forfeiture of a P1 billion worth MT Alpine vessel questioned by its owner before the Court of Tax Appeals (CTA). The Seaworld Management and Trading Inc. (SMTI) filed a petition for review and appealed to the CTA to release the vessel. The case stemmed from BoC-Port of Limay’s seizure of MT Alpine for unlawful discharge and transfer of fuel oil to MT Malolos without paying taxes. But the BoC stood its ground saying that the seizure and forfeiture of the vessel in favor of the government has legal basis under the Customs Moderization and Tariff Modernization Act (CMTA) off 2016 and other existing laws. “The non-payment of duties and taxes on the subject shipment which was discharged via loop loading from their vessel to MT Malolos qualifies the importation as contrary to law thus subject to seizure and forfeiture,” Port of Lima Collector Julius Premediles said. Play

He stressed that SMTI should have exhausted all administrative remedies before bringing the case to the CTA. The vessel was forfeited in favor of the state in accordance with Section 1113 (a) of the CMTA and other customs laws, rules, and regulations. Last month, customs intelligence operatives also seized four vessels believed to have entered the country illegally or without paying the corresponding duties and taxes to the government. According to Customs Commissioner Nicanor Faeldon, the alleged smuggled foreign vessels were also being used in the illegal quarrying of magnetic black sand along the Cagayan River. Faeldon said the owners of the vessels had failed to present documents that duties and taxes had been paid on the shipments. The customs chief ordered the operation following intelligence reports that the foreign vessels have allegedly been operating in Aparri, a first class riverside municipality in Cagayan province. The first vessel, the MV Nova 1, was located at the Parradun Sur Quarry site in Aparri, while the three other vessels, MV Vela 1, MV Vela 3 and Monte Cristo II, were found at the Hua Xia/Pine Sand compound in Barangay (village) Tallungan, also in Aparri