In October 2017, President Rodrigo Duterte issued Executive Order (EO) No. 46 reviving the Bureau of Customs Post Clearance Audit Group (BOC-PCAG).
In 2013, the audit function of the BOC was transferred to the Fiscal Intelligence Unit (FIU) of the Department of Finance pursuant to EO No. 155 series of 2013.
Republic Act (RA) No. 10863, otherwise known as the “Customs Modernization and Tariff Act”, (CMTA) which became effective in 2016, clarifies that Post Clearance Audit is a function and responsibility of the BOC.
The CMTA mandates the Post Clearance Audit Group (PCAG) to conduct within three (3) years from date of final payment of duties and taxes or customs clearance, an audit examination, inspection, verification, and investigation of records pertaining to any goods declaration, which shall include statements, declarations, documents, and electronically generated or machine readable data, for the purpose of ascertaining the correctness of the goods declaration and determining the liability of the importer for duties, taxes, and other charges, including any fine or penalty.
The penalty for non-compliance is very costly. If audit discloses deficiencies in duties and taxes, the penalty ranges from 125% to 600% of the revenue loss depending on the degree of culpability.
Many importers are probably unaware of inadvertent non-compliance. As such, the biggest challenge is how to ascertain the high level of compliance with existing customs rules and regulations.
To prepare for customs audit, importers could consider conducting internal due diligence and compliance review of past transactions to determine their level of compliance and assist them in identifying flaws in their process.
In case you want to know more about Post Clearance Audit, please do not hesitate to call us at +63 (2) 742-8963 or email Atty. Emer Aceron (emer.aceron@wciph.com) or Atty. Rod Pino (rod.pino@wciph.com).
Regards,
Worldtrade Consultants Inc.
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