CAO 12- 2019

Transshipment of
Goods
 Introduction
This CAO implements Section 603,
Chapter 2, Title VII and other relevant
provisions of Republic Act (R.A.) No.
10863, otherwise known as the
Customs Modernization and Tariff Act
(CMTA), and other related laws.
Section 1. Scope and Coverage. This CAO covers all foreign
goods for transshipment. The following activities are
excluded and shall fall outside the purview of this CAO:

1.1. Foreign Goods subject of Co-loading under Section 4 of

R.A. No. 10668"An Act Allowing Foreign Vessels to
Transport and Co-Load Foreign Goods for Domestic
Transshipment and for Other Purposes", and its Implementing
Rules and Regulations; and 1.2. Foreign Goods for shifting,
temporarily unloaded due to emergency or necessity and to be
re-loaded on board the same carrier and voyage or flight.
Section 2. Objectives
2.1. To provide guidelines for the movement,
transfer, and clearance of Transshipment Goods;
and

2.2. To protect revenues and public welfare

through the institution of safeguards and control
measures over Transshipment Goods.
Section 3. Definition of Terms. For purposes of this CAO, the
following terms are defined accordingly:

3.1. Airway Bill- shall refer to a transport document for

airfreight used by airlines and international freight forwarders
which specifies the holder or consignee of the bill who has the
right to claim delivery of the goods when they arrive at the
port of destination. It is a contract of carriage that includes
carrier conditions, such as limits of liability and claims
procedures. In addition, it contains transport instructions to
airlines and carriers, a description of the goods, and applicable
transportation charges.
3.2. Authorized Agent Bank (AAB)-shall refer to a
commercial bank authorized by the Bureau to collect
payment of duties, taxes and other charges.
3.3. Carrier-shall refer to the person actually transporting
goods or in charge of or responsible for the operation of the
means of transport such as airlines, shipping lines, freight
forwarders, cargo consolidators, non-vessel operating
common carriers and other international transport operators.
3.4.Customs Broker shall refer to any person who
is a bona fide holder of a valid Certificate of
Registration or Professional Identification Card
issued by the Professional Regulatory Board and
Professional Regulation Commission pursuant to
R.A. No. 9280, otherwise known as the "Customs
Brokers Act of 2004", as amended by R.A. No.
9853.5
3.5. Customs Facilities and Warehouses (CFW) shall refer to
facilities for temporary storage of goods established and
authorized by the Bureau pursuant to Title VIII, Chapter 2 of the
CMTA. These include container yards, container freight stations,
seaport temporary storage warehouses, airport temporary
storage warehouses and other premises, for customs purposes.
3.6. Derogatory Information shall refer to verifiable
information indicating that a certain shipment is in high risk of
probable violation of the provisions of the CMTA and related
laws.
3.7. Foreign Goods-shall refer to goods of foreign origin.
3.8. Goods-shall refer to articles, wares, merchandise, and
other items which are subject of importation, exportation or
transshipment.
3.9. Inward Foreign Cargo Manifest (IFCM)-also known as
inward goods declaration, which contains the particulars of an
import shipment such as the transport document numbers,
name of carrier, voyage or flight number, name of consignor
and consignees, marks and numbers, container information for
sea-freight, kinds and number of packages, description and
quantities, weights and measures of the goods, port of loading
and intended destination."
3.10. Marshalling Yard shall refer to a place where containers
are stacked and arranged according to the sequence of withdrawal
to inside the port or customs zone. It is also where the containers
are arranged prior to loading to a carrying vessel in accordance
with the sequence of loading on the stowage plan. This also
serves as temporary storage area for Transshipment Goods where
containers are arranged, stacked and stored temporarily.
3.11. Master of the Vessel - shall refer to the term that is given to
the captain of a ship or the chief commanding officer of a ship.
3.12. Perishable Goods-shall refer to goods
liable to perish or goods that depreciate
greatly in value while stored or which cannot
be kept without great disproportionate
expense.
3.13. Pilot-in-Command shall refer to a person
aboard the aircraft who is ultimately
responsible for its operation and safety during
flight.
3.14. Port of Entry-shall refer to the first Philippine port of call of a
foreign carrier. These shall be the ports designated as such by
applicable laws or by the President in the exercise of his authority to
open or close any port.

3.15. Port of Final Destination (of Goods) shall refer to the last
foreign port of call of a carrier to unload foreign Goods.

3.16. Shifting of Goods-shall refer to the movement of goods for any

purpose other than the regular handling, such as discharging of goods
destined for another port from carrier to pier or tarmac and shall be
reloaded to the same carrier.
3.17. Transfer Note shall refer to a document that accompanies
the transfer of Transshipment Goods to a Customs Facility and
Warehouse (CFW) and serves as proof of delivery or receipt of
the articles at its intended destination duly acknowledged on its
face by the Collector of Customs or his duly authorized
representative. It is also commonly referred to as a "boat note".
3.18. Transshipment refers to the customs procedure under
which goods are transferred under customs control from the
importing means of transport to the exporting means of transport
within the area of one customs office, which is the office of both
importation and exportation
3.19. Transshipment Goods-refer to goods that are transferred
under customs control from the importing means of transport to the
exporting means of transport within the area of one customs office,
which is the office of both importation and exportation.
3.20. Transshipment Goods Declaration-shall refer to the document
which is required by the BOC to be submitted, particularly describing the
nature and quantity of the goods subject of transshipment duly supported
by transport documents.
3.21. Twenty-Foot Equivalent Unit (TEU) shall refer to a unit of the
capacity of a container ship. The dimension of one (1) TEU is equal to that
of a standard twenty-footer shipping container (20 ft. long and 8 ft. high).
3.22. Weapons of Mass Destruction (WMD) shall refer to any
destructive device or weapon that is designed or intended to cause death
or serious bodily injury through the release, dissemination, or impact of
toxic or poisonous chemicals, or their precursors, any weapon involving a
biological agent, toxin, or vector, or any weapon that is designed to
release radiation or radioactivity at a level dangerous to human life. This
includes, but not limited to: (a) nuclear and radiological explosive devices
and their major sub-systems; (b) chemicals covered by Schedule I, II and
III of the Chemical Weapons Convention; and (c) biological agents and
biologically derived substances specifically developed, configured,
adapted, or modified for the purpose of increasing their capability to
produce casualties in humans or livestock, degrade equipment, or damage
crops.
Section 4. General Provisions.

4.1. Treatment of Transshipment Goods. Goods intended for

transshipment shall not be subject to the payment of duties and taxes,
provided, that the Transshipment Goods Declaration particularly
indicates such nature of goods, duly supported by commercial or
transport documents or evidence as required by the Bureau.
4.2. Period to Load. Goods intended for Transshipment must be
loaded in the exporting means of transport within thirty (30) calendar
days from the date of arrival. For this purpose, the exportation
commences upon the actual loading on board the exporting carrier of
the Transshipment Goods.
The Bureau shall allow an extension of such period for valid causes,
such as the following:
4.2.1. Force majeure;
4.2.2. Act of public enemy in war, whether international or civil;
4.2.3. If the container is damaged or leaked;
4.2.4. Legal order or act of competent public authority; and
4.2.5. Other causes beyond the control of shipper or agent or other
analogous situation.

Provided, that the Transshipment Goods must be loaded on board the

exporting carrier within a reasonable period when the causes for such
extension cease to exist.
4.3. Failure to Load. In case of failure to load within the period
allowed, the Transshipment Goods shall be treated by the Bureau
as regular importation. When the owner or interested party, after
due notice, fails to file the goods declaration within the prescribed
period under Section 407 of the CMTA, the goods shall be
subjected to the provisions of Chapter 6 of the CMTA on
abandonment.

4.4. Transfer Note. Transfers of Transshipment Goods from the

carrier to the designated CFW and vice versa shall be
accompanied by a Transfer Note or any other document or system
to be adopted and utilized for the purpose.
4.5. Customs Supervision in the Handling and Movement of
Transshipment Goods. The handling and movement of Transshipment
Goods from the Carrier to and within the CFW inside the Port of Entry
shall be under continuous supervision and subject to the rules and
regulations issued by the Bureau to include safeguard measures to ensure
that Transshipment Goods shall not be diverted to the domestic market.
4.6. Transshipment Goods Declaration. The Bureau shall develop a
system for the data capture of all transshipment transactions for effective
monitoring and statistical reporting. Until such time, monitoring and
statistical reporting of transshipments shall be governed by existing rules
and regulations issued by the Bureau.
 4.6.1. For outbound goods by sea subject to transhipment, the
Carrier or its Customs Broker or authorized representative shall
electronically submit the Transshipment Goods Declaration in the
Bureau's automated system prior to loading into the carrying vessel.
4.6.2. For outbound goods by air subject to transshipment, the
Customs Inspector on board shall allow the loading of goods to the
aircraft by tagging the Airway Bill in the Bureau's automated
system. For this purpose, the presentation of the IFCM or Airway
Bill shall suffice as Transshipment Goods Declaration. All other
customs formalities in the movement of goods as provided under
Section 4.4 and 4.5 herein shall be complied with.
4.7. Prohibited Goods covered by International Conventions or
Agreements.

4.7.1. Hazardous and nuclear wastes, WMD, nationally

controlled goods without the requisite prior authorization from
the appropriate regulatory agency, if applicable, and other
goods subject of prohibitory laws or international conventions
wherein the Philippines is a signatory, e.g. Basel Convention,
CITES, etc., shall not be discharged from the carrier even for
transshipment purposes.
 4.7.2. Goods covered by Section 4.7.1 discharged at the port
shall be seized by the Bureau and proceeded against in
accordance with this CAO and other existing rules and
regulations without prejudice to the filing of appropriate
prosecution against the persons liable for administrative or
criminal offenses, if any.
4.7.3. Transshipment Goods covered by Basel Convention and
RA No. 6969, otherwise known as the "Toxic Substances and
Hazardous and Nuclear Wastes Control Act of 1990", discharged
at the port shall be immediately returned to the country of origin
by the importing carrier or agent either before or after the seizure
proceeding, without prejudice to the filing of administrative or
criminal charges, if any, against any person involved.
4.8. Seizure of Transporting Vessel. In case of hazardous waste,
radioactive waste and other toxic substances provided under the
Basel Convention and R.A. No. 6969, the transporting vessel shall
be seized by the Bureau and proceeded against in accordance with
the CMTA.
4.9. Goods with Derogatory Information. Transshipment Goods
with derogatory information shall be subjected to non-intrusive
inspection or physical examination, for verification, upon order of
the District Collector, in the presence of representative from the
carrier and concerned regulatory agency, if applicable.
4.10. Seizure of Transshipment Goods. Prohibited goods for transshipment
covered by international conventions or any laws shall be seized by the Bureau.
The procedure on the seizure and forfeiture shall be governed by existing rules
and regulations on seizure and forfeiture.
4.11. Data Monitoring. The Bureau of Customs shall institutionalize a
reporting system for the proper monitoring of all transshipments.

The collection, recording, storage maintenance, processing, sharing of data and

information, and maintenance of data information under this CAO shall be
secured consistent with the principles and policy of R.A No.10173, also known
as "The Data Privacy Act"
4.12. Risk Management. A risk management system shall be used to carry out
necessary control mechanisms for Transshipment Goods.
Section 5. Operational Provisions.

5.1. Responsibilities of the Carrier. The Carrier shall submit an

electronic copy of the IFCM to the Bureau thru the Advance
Manifest System (AMS) within the prescribed period in
accordance with the existing regulation issued by the Bureau.
5.2. Responsibilities of the Customs Facility and Warehouse
(CFW) Operator inside the Port.
5.2.1. Provide a Marshalling Yard where the containers for
transshipment will be stored.
5.2.2. Match the advanced manifest to the discharging sequence list from
the Master of the Vessel as received on arrival
5.2.3. Submit inventory report every two (2) weeks on the status and
exact location of all Transshipment Goods within the container yard
5.2.4. Provide adequate security in the Marshalling Yard to prevent
unauthorized withdrawal of Transshipment Goods stored therein.

5.3. Special Permit to Load. The importing carrier or shipping agent

shall secure a Special Permit to Load for Transshipment Goods from the
District Collector through the Deputy Collector for Operations
specifying the goods to be transshipped.
Section 6. Supervision Fees. The Bureau shall
collect the following fees for all Transshipment
Goods:

6.1. In case the port of entry is Port of Manila or

Manila International Container Port -
Php1,000/TEU.

6.2. In case of other ports of entry -

Php100.00/TEU.
6.3. For Goods to be transshipped via air, a service
fee amounting to Php1.00 per kilo shall be paid by
the freight forwarders or authorized agent.

A copy of the original receipt issued by the AAB

shall be attached to the print-out copy of
Transshipment Declaration or Airway Bill
submitted to the Bureau prior to the loading of the
Transshipment Goods.
Section 7. Schedule of Penalties.

7.1. Unloading of Goods for Transshipment before Arrival at Port of

Entry, If, upon the arrival within the limits of any Customs District of the
Philippines of any Carrier engaged in foreign trade, the Master of the
vessel or Pilot-in-Command thereof permits any part of the Goods to be
unloaded before arrival at the Port of Entry, and without authority from
proper customs officer, the owner, operator, or agent of such Carrier shall
be liable for the following fines
7.1.1. First Offense - Five Hundred Thousand Pesos
(Php500,000.00)
 7.1.2. Second Offense - One Million Pesos (Php1,000,000.00)
7.1.3. Third Offense - Two Million Pesos (Php2,000,000.00)

Provided, that no fine shall accrue upon satisfactory proof to the

proper District Collector that the unloading was rendered
necessary by stress of weather, accident or other necessity,
provided, however, that the fine imposed herein shall be without
prejudice to the application of fines or penalties provided under
Section 1401 of the CMTA.
7.2. Unloading of Goods for Transshipment at Improper
Time and Place after arrival. The owner or operator of any
Carrier from which Transshipment Goods are discharged upon
arrival in the Philippines at a time or place other than that
designated by the District Collector, shall be liable for the
following fines:

7.2.1. First Offense - One Hundred Thousand Pesos

(Php100,000.00)
7.2.2. Second Offense - Two Hundred Thousand Pesos
(Php200,000.00)
 7.2.3. Third Offense - Three Hundred Thousand
Pesos (Php300,000.00)

Provided, that no fine shall accrue upon satisfactory

proof to the proper District Collector that the
unloading was rendered necessary by stress of
weather, accident or other necessity.
7.3. Failure to Supply Advance and Requisite
Manifest. Except for causes beyond the control of
the owner, operator or agent of the Carrier, failure to
transmit the electronic copy of the IFCM within the
required time prior to the arrival of the Carrier at the
Port of Entry shall make the owner, operator, or
agent of the Carrier liable for the following fines:
 7.3.1. First Offense - One Hundred Thousand Pesos
(Php100,000.00)
7.3.2. Second Offense - Two Hundred Thousand Pesos
(Php200,000.00)
7.3.3. Third Offense - Three Hundred Thousand Pesos
(Php300,000.00)

Failure to present the requisite manifest to the Bureau during

board formalities shall likewise make the owner, operator, or
agent of the vessel or aircraft liable for the fines above.
7.4. Disappearance of Manifested Goods for
Transshipment. When any package or goods for
transshipment mentioned in the manifest meant to be
unloaded upon the arrival of the carrier is not unloaded or is
missing or has disappeared, its agent shall be liable for the
following fines unless the disappearance of the package or
the goods in question was not due to the negligence of the
Master of the vessel or Pilot-in-command of an aircraft and
is explained to the satisfaction of the District Collector:
 7.4.1. First Offense - One Hundred Thousand Pesos
(Php100,000.00)
7.4.2. Second Offense - Two Hundred Thousand Pesos
(Php200,000.00)
7.4.3. Third Offense - Three Hundred Thousand Pesos
(Php300,000.00)

The owner, operator, or agent of a Carrier shall be liable for the

payment of the same fine when a package or goods listed in the
manifest do not tally materially in character or otherwise with the
description thereof in the manifest.
7.5. False statement of Port of Final Destination of
Transshipment Goods. When the Master of a Vessel or the Pilot-in-
Command of the aircraft loaded with goods shall make a false
statement as to the final destination of Transshipment Goods loaded
on-board such carrier, the owner or operator of such carrier shall be
liable for the following fines:

7.5.1 First Offense - One Hundred Thousand Pesos

(Php100,000.00)
7.5.2.Second Offense - Two Hundred Thousand Pesos
(Php200,000.00)
 7.5.3. Third Offense - Three Hundred Thousand Pesos
(Php300,000.00)

The arrival of a carrier at a different port other than the one it

had been originally authorized and cleared for shall be enough
to support the conclusion that the original statement as to the
actual destination of the carrier was false, unless such arrival
occurred due to necessity, e.g. arrival under stress, ship repairs,
replenishment of stores, and other analogous circumstances.
7.6. In case of failure to load within the period
allowed, the importing means of transport shall be
liable for the following fines:

7.6.1. For sea Goods, Five hundred Pesos

(Php500.00) per TEU per day.
7.6.2. For air Goods, One hundred Pesos
(Php100.00) per kilogram per day.
7.7. Any person who violates any provision of this CAO or
Customs Memorandum Order issued pursuant thereto, for
which delinquency no specific penalty is provided, shall be
liable for the following fines:

7.7.1. First Offense - One Hundred Thousand Pesos

(Php100,000.00)
7.7.2. Second Offense - Two Hundred Thousand Pesos
(Php200,000.00)
7.7.3. Third Offense - Three Hundred Thousand Pesos
(Php300,000.00)
Section 8. Periodic Review. Unless otherwise provided,
this CAO shall be reviewed every three (3) years and be
amended or revised, if necessary.

Section 9. Separability Clause. If any part of this CAO

is declared by Courts as unconstitutional or contrary to
existing laws, the other parts not so declared shall
remain in full force and effect.
Section 10. Repealing Clause. Rules and regulations or parts
thereof inconsistent with the provisions of this CAO are hereby
expressly repealed, amended and/or modified accordingly.

Section 11. Effectivity. This Order shall take effect thirty (30)
days after its complete publication in the Official Gazette or a
newspaper of general circulation. The Office of the National
Administrative Register (ONAR) of the UP Law Center shall be
provided a three (3) certified copies of this CAO.
SEC. 407. Goods Declaration and Period of Filing. -As far as practicable,
the format of the goods declaration shall conform with international
standards. The data required in the goods declaration shall be limited to
such particulars that are deemed necessary for the assessment and collection
of duties and taxes, the compilation of statistics and compliance with this
Act. The Bureau shall require the electronic lodgement of the goods
declaration.

The Bureau shall only require supporting documents necessary for customs
control to ensure that all requirements of the law have been complied with.
Translation of supporting documents shall not be required except when
necessary.
Goods declaration must be lodged within fifteen (15) days
from the date of discharge of the last package from the
vessel or aircraft. The period to file the goods declaration
may, upon request, be extended on valid grounds for
another fifteen (15) days: Provided, That the request is
made before the expiration of the original period within
which to file the goods declaration: Provided, however,
That the period of the lodgement of the goods declaration
may be adjusted by the Commissioner.
SEC. 603. Customs Transshipment. Goods admitted for
transshipment shall not be subject to the payment of duties and
taxes: Provided, That the goods declaration for customs
transshipment particularly indicates such nature of the goods, duly
supported by commercial or transport documents or evidence as
required by the Bureau.

Goods for transshipment must be exported from the Philippines

within thirty (30) days from arrival thereof. The Commissioner
may allow an extension of such period after the establishment of
valid reasons.
THAT’S ALL
AND
THANK YOU!