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Introduction.  This  CAO  implements  Section  800  (9),  Chapter  1,  Title  VIII; Section 423, Chapter 3, Title IV; and other related provisions of Republic Act No. 10863, otherwise known as the Customs Modernization and Tariff Act (CMTA) in so far as the consolidated shipment of Balikbayan Boxes is concerned.

Section 1. Scope. This covers consolidated shipments of Balikbayan Boxes entered  through  any  port  of  entry  sent  to  families  or  relatives  by  Qualified Filipinos While Abroad. Balikbayan Boxes brought in through means other than consolidated shipments shall be covered by a different CAO.
 
Section 2. Objectives.

2.1 To prescribe simplified customs clearance procedures for consolidated shipment of Balikbayan Boxes sent by Qualified Filipinos While Abroad to their families or relatives in the Philippines;

2.2 To  facilitate  customs  clearance  of  consolidated  shipment  of  Balikbayan Boxes with the aid of risk management techniques and Information and Communication Technology (ICT)-enabled monitoring and control systems consistent  with  the  Bureau’s  revenue  collection  and  border  protection function; and

2.3 To adopt clear and transparent customs rules, regulations, policies and procedures, consistent with international standards and customs best practices.^[1]

Section 3. Definition of Terms. For purposes of this CAO, the following terms are defined as follows:

3.1     Availment  -  shall  refer  to the determination by the Bureau or by the qualified senders that the Balikbayan Boxes brought in or sent are counted as first, second or third within a calendar year and thus entitled to duty and tax exemption pursuant to Section 800 (g), Chapter 1, Title VIII, CMTA. Any amount in excess of the allowable non-dutiable and non-taxable value shall be subject to the applicable duties and taxes.

Shipment that is above the de minimis threshold shall be automatically considered as one availment. De minimis importation shall not be included in the counting of availment; provided that the Qualified Filipinos While Abroad can only send to one ultimate consignee in one consolidated shipment.

3.2    Balikbayan Box – shall refer to a corrugated box or other container or receptacle up to a maximum volume of two hundred thousand (200,000) gross cubic centimeters without regard as to the shape of the container or receptacle.

For  purposes  of  duty  and  tax  exemption,  the  Balikbayan  Box  should contain only personal and household effects that shall neither be in commercial quantities nor intended for barter, sale or for hire sent by Qualified Filipinos While Abroad often shipped by freight forwarders specializing in Balikbayan Boxes by sea or air.

3.3     Calendar Year - shall refer to the period from January 1 to December 31 of the same year.^[2]

3.4     Commercial Quantity - shall refer to the quantity for a given kind or class of   articles   which   are   in   excess   of   what   is   compatible  with  and commensurate to the person’s normal requirements for personal use.^[3] For a single sender with multiple ultimate consignees, commercial quantity of a given class shall be determined based on the total quantity thereof sent by the sender to all the consignees.

3.5     Consolidated  Cargo  Manifest  -  shall  refer  to  the  true  and  correct manifest of all the individual shipments/consignments in a consolidated shipment destined to be unladen in a port of entry in the Philippines, the same being attached as a rider to the Inward Foreign Manifest of the carrying vessel or aircraft.^[4]

3.6     Consolidated Shipments - shall refer to two (2) or more shipments from two (2) or more individual consignors/senders abroad, assembled and consolidated at one point of origin or exportation and shipped together under a single master ocean bill of lading or master air waybill of lading by a consolidator to its Deconsolidator in the Philippines.^[5]

3.7     Consolidator  -  shall  refer  to  a  foreign-registered  forwarding  company acting as a Non-Vessel Operating Common Carrier (NVOCC) which procures transport of goods by sea or air and issues in its name house bill of lading or house air waybill to consignors of shipments under its solicitation, to whom it directly assumes the liabilities and responsibilities of a common carrier for the transportation of such goods from the point of receipt to the point of destination of such goods, and ships the shipments together in its name under a master bill of lading/master air waybill consigned to its Deconsolidator or Freight Forwarder at the port of destination in the Philippines.^[6]

3.8     Deconsolidator  -  shall  refer  to  a  consolidator’s  agent  situated  at  the country of importation that provides services to ungroup or deconsolidate shipments, orders, goods, etc. to facilitate distribution. Deconsolidator may also refer to a Breakbulk Agent.

3.9     De Minimis Value - shall refer to the value of goods for which no duty or tax is collected^[7]

3.10   Family and Relatives - shall refer to relatives up to the fourth (4th) civil degree of consanguinity or affinity.

3.11  FCA - shall refer to an international commercial term covered by the Incoterms® Rules 2010 developed by International Chamber of Commerce (ICC) that refers to “Free Carrier” which means that the seller delivers the goods to the carrier or another person nominated by the buyer at the seller’s premises or another named place. The parties are well advised to specify as clearly as possible the point within the named place of delivery, as the risk passes to the buyer at that point.^[8]

3.12  Freight Forwarder - shall refer to a local entity that acts as a cargo intermediary  and  facilitates  transport  of  goods  on  behalf  of  its  clients without  assuming  the  role  of  a  carrier,  which  also  performs  other forwarding  services,  such  as  booking  cargo  space,  negotiating  freight rates,   preparing   documents,   advancing   freight   payments,  providing packing or crating, trucking and warehousing, engaging as an agent or as a representative of a foreign NVOCC or as a cargo consolidator named in a master bill of lading as consignee of a consolidated shipment, and other related undertakings.^[9]

3.13   House Air Waybill (HAWB) - shall refer to an air waybill covering a single, individual shipment or consignment issued by the freight forwarder or consolidator to the consignor or sender containing the names and addresses,  respectively,  of  both  the  consignor  or  sender  and  the consignee or receiver and the detailed, specific description of the goods shipped through air.^[10]

3.14   House Bill of Lading (HBL) - shall refer to a bill of lading covering a single, individual shipment or consignment issued by the freight forwarder to the consignor or containing the names and addresses, respectively, of both  the  consignor  or  sender  and  the  consignee  or  receiver  and  the detailed, specific description of the goods shipped through sea.^[11]

3.15  Household Effects - shall refer to furniture, dishes, linens, libraries, and similar household furnishings for personal use or family use.^[12]

3.16  Master Air Waybill (MAWB) - shall refer to an air waybill issued by a common air carrier to a consolidator covering a consolidated shipment.^[13]

3.17  Master Ocean Bill of Lading (MBL) - shall refer to an ocean bill of lading issued  by  a  common  ocean  carrier  to  a  consolidator  covering  a consolidated shipment.^[14]

3.18  Non-Vessel Operating Common Carrier (NVOCC) – shall refer to a transport enterprise which publishes its own freight tariff, issues its own bills of lading and assumes all responsibilities of a common carrier without operating its own vessels.^[15]

3.19   Non-Resident  Filipinos  -  shall  refer  to  those  Filipinos  who  have established permanent residency abroad but have retained Filipino citizenship,  whether  or  not  they  have  availed  of  the  benefits  under Republic Act No. 9225 or the Citizenship Retention and Re-acquisition Act of 2003.

3.20   Overseas Filipino Worker (OFW) - shall refer to a holder of a valid passport issued by the Department of Foreign Affairs (DFA) and certified by Department of Labor and Employment (DOLE) or the Philippine Overseas Employment Administration (POEA) for overseas employment purposes. This covers all Filipinos working in a foreign country under employment  contracts,  regardless  of  their  professions,  skills  or employment status in a foreign country.^[16]  For purposes of this CAO, the term OFW includes Filipinos working abroad under job contracts who do not require a certification from the DOLE or the POEA.

3.21  Personal Effects - shall refer to commodities whether new or used, for personal use or consumption and not for commercial purposes, such as wearing apparel, personal adornments, electronic gadgets, toiletries, or similar items.

3.22   Qualified Filipinos While Abroad - shall refer to a collective term used to refer to Non-Resident Filipinos defined in Section 3.19, OFWs defined in Section 3.20, and Resident Filipinos under Section 3.24 of this CAO.

3.23  Regulated  Importation  -  shall  refer  to  goods  which  are  subject  to regulation and may be imported or released only after securing the necessary clearances, permits, licenses, and any other requirements.^[17]

3.24   Resident  Filipinos  -  shall  refer  to  Resident  Filipino  citizens  who temporarily stay abroad which may include holders of student visa, holders of investors’ visa, holders of tourist visa and similar visas which allow them to establish temporary stay abroad.

3.25  Ultimate Recipient or Consignee - shall refer to the Family Member or Relative of the Sender of the Balikbayan Box who will be the ultimate beneficiary of the same.

Section 4. General Provisions.

4.1    Qualified Filipinos While Abroad are allowed to send to their Families or Relatives in the Philippines Balikbayan Boxes which shall be exempt from the payment of duties and taxes, up to three (3) times in a calendar year.

Balikbayan  Boxes  brought  in  by  Qualified  Filipinos  from  abroad  as accompanied or unaccompanied baggage as passengers shall be included in counting the availment. A shipment that is more than the De Minimis Value of Php10,000.00 shall be automatically considered as one availment.

4.2    Balikbayan boxes shall contain personal and household effects only and shall neither be in commercial quantities nor intended for barter, sale or for hire, and that the total FCA value for all Balikbayan Boxes per sender in any calendar year shall not exceed One Hundred Fifty Thousand Pesos (Php150,000.00).

4.3    Duty and Tax-free importation of Balikbayan Boxes under this CAO is limited  to  Qualified  Filipinos  While  Abroad.  Sole  proprietorships  and juridical entities, such as cooperatives, corporations, and partnerships sending Balikbayan Boxes are not qualified to avail of the benefits under this CAO.^[18]

4.4    The  Bureau  shall  establish  a  monitoring  system  to  ensure  that  this exemption is availed of up to three (3) times only in a calendar year. Balikbayan Boxes brought in through means other than consolidated shipments shall be covered by a different CAO, but shall be included in counting the frequency of availment of the privilege under Section 800 (g) of the CMTA, i.e. CAO No. 01-2017 on Baggage of Travelers and Crew, CAO No. 03-2017 on Postal Items, and CAO on Express Shipments.

4.5   In coordination with the concerned government agencies and with the cooperation of the consolidators abroad through their respective local agents, the Bureau shall establish a registration system and/or database of Deconsolidators, Qualified Filipinos While Abroad, as well as their respective families and relatives as ultimate recipients or consignees, who may enjoy the benefits of such exemption.

4.6    For purposes of counting the frequency of availment of the privilege which is up to maximum of three (3) times per calendar year, shipment of Balikbayan Boxes sent by a qualified sender, regardless of the number of ultimate consignees and number of Balikbayan Boxes in one consolidated shipment covered by one master bill of lading or master air waybill, shall be considered as one availment.

4.7    When a consolidated shipment of Balikbayan Boxes is subject to alert or any enforcement action or intervention, and if after inspection some individual boxes are found to have violated the provisions of the CMTA, the same shall be segregated and proceeded against accordingly. Balikbayan boxes which are compliant with the existing rules and regulations shall be released immediately.

4.8    The  Bureau  shall  adopt  the  use  of  an  ICT-enabled  system  in  the processing of Balikbayan Boxes and the monitoring of the availment of the privilege by senders of Balikbayan Boxes.

4.9    For the availment of the tax and duty exemption pursuant to Section 800 (g) of the CMTA, a processing charge of One Hundred Twenty Five Pesos (Php125.00) (inclusive of the customs documentary stamps of Php15.00 and legal research fee of Php10.00) shall be collected per house bill of lading/house air waybill. The Commissioner may periodically review the amount of the processing charge and revise the same based on prevailing costs.

4.10  Strict Compliance to Due Notice Requirement. In case of consolidated shipments of Balikbayan Boxes for which no goods declaration has been lodged or which remain unclaimed, the Bureau shall undertake measures to identify the names of the individual consignees and their addresses and send them Notice to File Entry or Claim   within fifteen (15) days from receipt of the Notice.

The Bureau shall prescribe in the Customs Memorandum Order (CMO) the rules and procedures to be applied for the individual release of Balikbayan Boxes by their respective consignees and for the lodgement of the goods declaration within the required period.

The Deconsolidator shall be obliged to answer for the various charges that may be incurred by the Bureau such as government storage, arrastre, shipping demurrage, stripping and stuffing charges and other incidental expenses, not otherwise chargeable against the Forfeiture Fund, in case of implied abandonment of the goods.

Failure to comply with the obligations shall constitute a ground for the imposition of the sanctions prescribed under this CAO.

Section 5. Obligations of the Parties.

5.1 Obligations of Qualified Filipinos While Abroad.

5.1.1 Ensure  that  only  personal  effects  and  household  goods  are  sent through consolidated shipment of Balikbayan Boxes.

5.1.2 Accomplish, sign and submit the Information Sheet^[19]  to be designed by the Bureau and attached as an annex to the CMO to be issued by the  Commissioner  to  further  implement  this  CAO.  The Information Sheet shall serve as the packing list of the Balikbayan Box and shall contain the following basic information:

a.    Complete name of the shipper/sender, date of birth, citizenship, passport  details,  address  abroad  and  in  Philippines,  contact number and e-mail address, if any;
b.    Relationship of the shipper/sender to the consignee;
c.    Contact number, postal and e-mail address of the Consignee;
d.    Total value of contents and number of Balikbayan boxes;
e. Packing List Information which shall contain an itemized listing of all goods in each Balikbayan Box and their respective quantities and description;
f. Number of Availments within the calendar year; and 
g. Other essential information as may be required by the Bureau.

5.1.3  Submit the following documents:

a.    Photocopy of any documents containing the Qualified Filipino’s citizenship, full name (First Name, Middle Name, Surname & Suffix), date of birth and place of birth, including:

i.    Pertinent  page  of  the  Philippine  passport  with  personal information, picture and signature or in case of dual Filipino citizen without Philippine passport, photocopy of foreign passport with personal information, picture and signature plus copy of proof of dual Filipino citizenship;
ii.    Permanent  Resident  ID  or  equivalent  document  in  other
countries (e.g. Green Card, IQAMA^[20]) ;
iii.   Overseas Employment Certificate (OEC) / OWWA Card;
iv.   Work Permit;
v.    Unified Government ID issued by the Department of Labor and Employment (DOLE); and
vi.   Any other equivalent document (except Birth Certificate):

vi.1  Any Philippine Government issued ID which states the
Filipino citizenship; and

vi.2  Any foreign government issued ID that show full name, date of birth, place of birth, and Filipino citizenship.

b.    Invoice,  receipt  or  equivalent  document  covering  the  goods contained in the Balikbayan Box, if available.

5.1.4 The sender shall submit the required documents to the Consolidator who shall then transmit the Information Sheet and supporting documents as mentioned in Section 5.1.2 of this CAO to the Deconsolidator in a secured electronic format before arrival of the goods in the Philippines and within the period prescribed in Section

5.2.3 of this CAO.

5.2 Obligations of the Deconsolidator.

5.2.1 The Deconsolidator or Freight Forwarders acting as Deconsolidators shall  apply  for  registration  with  the  Bureau,  in  addition  to  the registration requirements imposed by other government agencies by submitting the following documentary requirements:

a.    Duly filled-up application form; and
b.    Copy of the Service Contract with the Consolidator and all of its annexes.

5.2.2 The Deconsolidator shall ensure that their principals abroad are made fully aware of the need for senders to provide information and documents as listed in Section 5.1.2 of this CAO, to enable the expeditious processing of the deconsolidated goods.

5.2.3 The Deconsolidator shall transmit to the Bureau the Information Sheet and supporting documents submitted by the sender in a secured electronic format before arrival of the goods in the Philippines and within the period prescribed below from the departure of the carrying vessel at the original port of loading for consolidated shipments by sea:

a.    Three  (3)-day  shipping  time:  Twenty-four  (24)  hours  prior  to arrival;
b.   Seven (7)-day shipping time: Forty-eight (48) hours prior to arrival;
and
c.    Coming from America, Europe, Middle East, and other parts of the world whose shipping time does not fall under Section 5.2.3 (a) and (b): Ten (10) days prior to arrival.

For shipments carried by aircraft, the following periods shall apply:

a.   Those coming from Asia - 1 hour before arrival; and
b.   Those coming from other countries - 6 hours prior to arrival.

5.2.4 Within one year from the effectivity of this CAO, each Deconsolidator shall establish its own Customs Facility and Warehouse (CFW) equipped with CCTVs and baggage X-ray machine for the conduct of examination, as may be required by the Bureau.

The installation of x-ray machine shall depend on the scale, volume of importation or capitalization of the Deconsolidator.

In the alternative, the port operator, Deconsolidators or any third party may establish and maintain their own baggage X-ray facility subject to such  service  arrangements  as  may  be  agreed  upon  between  the facility operator and the client-Deconsolidator.

All baggage x-ray facilities shall be under the control and supervision of the Bureau and only trained BOC personnel shall be allowed to operate the baggage x-ray machines.

Section 6. Sanctions. The following acts shall constitute violations of this CAO and shall be subject to the sanctions provided thereunder to be imposed after due notice and hearing:

6.1 The Deconsolidator and all other participants who use the Balikbayan Box duty and tax-exempt privilege as conduit for smuggling or other fraud against customs:

6.1.1  Imposition of fines as provided under Section 1401 of the CMTA;
6.1.2  Criminal prosecution under Title XIV of the CMTA; and
 
6.1.3 Cancellation of registration as Deconsolidator or Freight Forwarder acting as Deconsolidator, as may be applicable.

The imposition of the above penalties shall be on a per HBL or HAWB basis and without prejudice to the action of the Fair Trade Enforcement Bureau of the Department of Trade and Industry (FTEB-DTI) and Civil Aeronautics Board (CAB) to blacklist the erring Deconsolidator pursuant to its own rules and regulations.

6.2 Failure of the Consolidator to provide in advance basic information shall subject the Deconsolidator to the following sanctions:

6.2.1  First Offense - Warning;
6.2.2  Second Offense - Penalty of Php100,000.00;
6.2.3  Third Offense - Penalty of Php200,000.00; and
6.2.4  Succeeding Offenses - Penalty of Php300,000.00.

6.3 The Deconsolidator or broker who fails without valid justification to lodge the goods declaration or to claim the goods within the prescribed period:

6.3.1  First Offense - Penalty of Php100,000.00;
6.3.2  Second Offense - Penalty of Php200,000.00; and
6.3.3 Third Offense - Penalty of Php300,000.00 and the cancellation of registration as Deconsolidator or Freight Forwarder acting as Deconsolidator, as may be applicable.

6.4 Failure to comply with any of the other obligations defined in this CAO:

6.4.1  First Offense - Warning;
6.4.2  Second Offense - Penalty of Php100,000.00;
6.4.3 Third Offense - Penalty of Php200,000.00 and six (6) months suspension  of   the  registration  as  a  Deconsolidator   or   Freight Forwarder acting as Deconsolidator, as may be applicable; and
6.4.4 Fourth Offense - Penalty of Php300,000.00 and cancellation of registration as Deconsolidator or Freight Forwarder acting as Deconsolidator, as may be applicable.

6.5 The imposition of the penalties prescribed in Section 6.2 to 6.4 shall be on a per MBL or MAWB basis and without prejudice to the action of the Fair Trade Enforcement Bureau of the Department of Trade and Industry (FTEB-DTI) and Civil Aeronautics Board (CAB) to blacklist the erring Deconsolidator pursuant to its own rules and regulations.

Section 7. Exclusions from the Duty and Tax Exemption and/or Simplified Clearance Procedure. The following shipments shall be excluded from duty and tax exemption and/or simplified clearance procedure:

a.    Shipment  of  Balikbayan  box,  the  contents  of  which  have  FCA  value exceeding Php150,000.00;
b.    Shipments of a Qualified Filipino While Abroad whose total availments for any calendar year has exceeded Php150,000.00, even without exceeding the maximum number of availments per year;
c.    Shipments  of  a  Qualified  Filipino  While  Abroad  who  has  availed  of  the privilege three (3) times in a calendar year, even if the total for all availments has not exceeded Php150,000.00 for the said year;
d.   Goods in Commercial Quantity, except if qualified as de minimis importation;
e.   Regulated Goods in Commercial Quantity;
f.    Donations;
g.    Container mixed with other types of goods (e.g. donations, commercial and regulated goods, and goods for temporary admission); and
h.   Failure of the sender to comply with any of the obligations enumerated under Section 5.1.2.

Section 8. Compliance to Data Privacy Act of 2012. All consolidators, Deconsolidators, Freight Forwarders acting as Deconsolidators and other parties concerned shall be obliged to comply with the pertinent provisions of Republic Act No. 10173 or the Data Privacy Act of 2012, particularly on the collection and security of personal information.

Section 9. Additional Regulations. The Bureau shall issue a CMO for the following purposes:

9.1 To prescribe the format of the Information Sheet and the Goods Declaration;
9.2 To  provide  the  detailed  procedures  for  the  lodgment,  processing  and clearance of consolidated shipments of Balikbayan Boxes;
9.3 To  prescribe  the  parameters  for  the  installation  of  the  baggage  x-ray machine at the Deconsolidator’s CFW;
9.4 To    prescribe    the    additional    requirements    for    registration    of    the
Deconsolidators; and
9.5 To provide other details for the effective implementation of this CAO.

Section 10. Periodic Review. Unless otherwise provided, this CAO shall be reviewed every three (3) years and be amended or revised, if necessary.

Section 11. Repealing Clause. This CAO specifically supersedes CAO No. 05-2016.

Section 12. Separability Clause. If any part of this C?O is declared unconstitutional or contrary to existing laws, the other parts not so declared shall remain in full force and effect.

Section 13. Effectivity. This CAO 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 three (3) certified copies of this CAO.

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^[1] cf. CMTA, Title I, Chapter 2, Section 101 (b).

^[2] cf. CMTA, Title VIII, Chapter 1, Section 800 (g), paragraph 2.

^[3] CMO No. 67-77 as reiterated in DOF DO No. 57-2011, 2 (b).

^[4] cf. CMO No. 79-90 “Revised Rules and Regulations Governing the Entry of Non-Commercial Inbound Consolidation Shipments from Filipino Abroad, Repealing for the purpose CMO 32-90”, Section 2.1.6.

^[5] cf. CMO No. 79-90 “Revised Rules and Regulations Governing the Entry of Non-Commercial Inbound Consolidation Shipments from Filipino Abroad, Repealing for the purpose CMO 32-90”, Administrative Provisions, Definition of Terms, Section 2.1.1.

^[6]  CAO No. 5-89 “Revised Rules and Regulations Governing Inbound Consolidated Shipments By
Sea”, Definition of Terms, 3.

^[7]  cf. CAO No. 02-2016 “Imported Goods with De Minimis Value not subject to duties and taxes”,
Definition of Terms, Section 3.2.
 
^[8] International Commercial Terms 2010.

^[9] CMTA, Title I, Chapter 2, Section 102 (aa).

^[10] cf. CMO No. 79-90 “Revised Rules and Regulations Governing the Entry of Non-Commercial Inbound Consolidation Shipments from Filipino Abroad, Repealing for the purpose CMO 32-90”, Administrative Provisions, Definition of Terms, Section 2.1.5.

^[11] cf. CMO No. 79-90 “Revised Rules and Regulations Governing the Entry of Non-Commercial Inbound Consolidation Shipments from Filipino Abroad, Repealing for the purpose CMO 32-90”, Administrative Provisions, Definition of Terms, Section 2.1.5.

^[12] cf. U.S. Customs Border Protection (CBP) Info Center.

^[13]   cf. CMO No. 79-90 “Revised Rules and Regulations Governing the Entry of Non-Commercial
Inbound Consolidation Shipments from Filipino Abroad, Repealing for the purpose CMO 32-90”,
Administrative Provisions, Definition of Terms, Section 2.1.4.

^[14]  cf. CMO No. 79-90 “Revised Rules and Regulations Governing the Entry of Non-Commercial
Inbound Consolidation Shipments from Filipino Abroad, Repealing for the purpose CMO 32-90”,
Administrative Provisions, Definition of Terms, Section 2.1.4.

^[15] DTI Department Administrative Order No. 02 s.1995.

^[16] cf. CMTA, Title VIII, Chapter 1, Section 800 (9), paragraph 2.

^[17] cf. CMTA, Title I, Chapter 3, Section 117.

^[18] cf. CMTA, Title VIII, Chapter 1, Section 800 (g).

^[19] The Information Sheet form is downloadable from the BOC website: www.customs.gov.ph.
 
^[20]  An Iqama is a residence permit issued to those expatriates who arrive in Saudi Arabia on an employment visa. The Iqama is valid for a period of 1-2 years.