REPUBLIC OF THE PHILIPPINES

DEPARTMENT OF FINANCE
BUREAU OF CUSTOMS
MANILA

SEP 27 2001’

CUSTOMS ADMINISTRATIVE ORDER

NO: 3-2001

TO ALL Collectors of Customs

Service Chiefs
Division Chiefs
And Others Concerned

SUBJECT Rules and Regulations for Customs Operations

In the Poro Point Special Economic and Freeport Zone

AUTHORITY Pursuant to the provisions of the Revised Administrative

Code of 1987 in relation to Section 15 of Republic Act No.
7227, Proclamation Nos. 216, 270 and 179, Executive Order
No. 62, Presidential Decree No. 66 as amended, and the
Tariff and Customs Code of the Philippines (TCCP),
As amended, the following Rules and Regulations are
hereby promulgated.

CHAPTER I
DEFINITIONS

A. The following terms used in these Rules and Regulations are hereby defined as follows:

1. ACT – Republic Act No. 7227 otherwise known as the Bases Conversion and Development
Act of 1992

2. ARTICLES – when used with reference to importation and exportation, the term refers to
any raw materials, supplies, equipment, machinery, packaging materials, goods, wares,
merchandise, consumer items and, in general, anything that may, under the Tariff and
Customs Code, the Tax Code, and other applicable laws and the rules of JPDC, be made the
subject of importation into or exportation from the Zone.

3. CONTAINER – the outer container in which merchandise is held for storage or

transportation, and not an inter-modal container covered by the Customs Convention on
Containers done at Geneva on December 02, 1972, unless otherwise indicated.

4. CUSTOMS – means the Philippine Bureau of Customs.

5. CUSTOMS CLEARANCE AREA (CCA) – as provided for under Administrative Order No. 296,
this is an area, as shall be provided and delineated by the JPDC in consultation wih the
Bureau of Customs and to be guarded and managed by Customs, which shall be the clearing
and processing center for goods/cargoes entering and exiting the Zone.
6. CUSTOMS TERRITORY – the portion of the Republic of the Philippines where the customs
laws are in full force and effect, which is separate from the PPSEFZ.

7. DOMESTIC ARTICLES – refers to articles which are the growth, product, or manufacture
of the Philippines and upon which all national internal revenue taxes have been paid, if
subject thereto, and upon which no drawback or bounty has been allowed, and articles of
foreign origin upon which all duties and taxes, have been paid and upon which no drawback
or bounty has been allowed, or which have been previously been entered into, the Customs
Territory free of duties and taxes.

8. FOREIGN ARTICLES – articles of foreign origin on which duties and taxes have not been
paid, or upon which drawback or bounty has been allowed, or which have not been
previously entered into Customs Territory, or articles which are the growth, product or
manufacture of the Philippines on which not all internal revenue taxes have been paid, if
subject thereto, or upon which drawback or bounty has been allowed.

9. JOHN HAY PORO POINT DEVELOPMENT CORPORATION (JPDC) – is the JPDC Authority
authorized under Executive Order No. 103 and Section 3 of Presidential Proclamation No.
216, pursuant to Section 15 of the Act to manage and operate the PPSEFZ.

10. PERSON – a natural person, and not a juridical person, who brings merchandise into,
possesses merchandise in, or takes merchandise from the PPSEFZ, whether or not the
person is a resident of the PPSEFZ.

11. PPSEFZ REGISTERED ENTERPRISE – any sole proprietorship, partnership, corporation or

entity registered with the John Hay Poro Point Development Corporation (JPDC) to do
business in the Secured Area of PPSEFZ, whether or not for profit.

12. POINT OF ENTRY OR EXIT – refers to any place designated by JPDC and the Bureau of
Customs, Department of Finance, where articles may be lawfully introduced into or removed
from the Secured Area of the PPSEFZ.

13. PORT/AIRPORT OF ENTRY – for the importation and exportation of foreign articles
into/from PPSEFZ in accordance with this Administrative Order shall refer to the premises
declared by the President of the Republic of the Philippines as Port/Airport of Entry and
where the Customs houses shall be located.

14. PPSEFZ – refers to the “Poro Point Special Economic and Freeport Zone” under Section 1
of Proclamation No. 216, as amended by Proclamation No. 270, Series of 1993, of the
President of the Philippines, and Proclamation 179, Series of 1999, in relation to Sec. 15 of
RA No. 7227, which covers the land and bay areas which include the Wallace Air Station, the
San Fernando Airport, Seaport, Barangays Poro and San Vicente and portions of Barangays
San Agustin, San Francisco and Canaoay of the City of San Fernando, Province of La Union,
consisting of Eight Hundred (800) hectares, more or less, subject to the actual survey and
verification of the Department of Environment and Natural Resources (DENR). Areas that
will be reclaimed from adjoining shores of Poro Point shall also be included in the Poro Point
Special Economic and Freeport Zone (PPSEFZ).

15. PROCLAMATION – refers to Proclamation Nos. 216, 270 and 179 creating and
designating the area covered by the Poro Point Special Economic and Freeport Zone
pursuant to Republic Act No. 7227, defining the investment climate for Poro Point, and
directing all heads of departments, bureaus, offices and instrumentalities of government to
support the program.

16. RESIDENT – refers to those individuals and members of their immediate family who: (a)
are actually residing on a permanent basis within the Secured Area of the PPSEFZ by virtue
of domicile or employment; or (b) have qualified investments of at least US $100,000 or its
equivalent and (c) have continuously stayed within the Secured Area of the PPSEFZ for a
period of at least one hundred eighty (180) days.

17. RETAIL SALE – refers to the sale of articles within the Secured Area of the PPSEFZ, in
non-commercial quantities, to an individual or to a PPSEFZ Registered Enterprise for his/its
own use and account and not for resale.

18. RULES AND REGULATIONS – unless otherwise specified, the regulations issued by Bases
Conversion Development Authority to implement Republic Act No. 7227, Proclamation Nos.
216, 270 and 179 and Executive Order No. 62 and 103.

19. SECURED AREA – the area in the Zone which shall be designated by the JPDC, in
consultation with the Department of Finance and the Bureau of Customs which shall be the
only completely tax and duty-free area and within which shall be free and unimpeded flow
of goods and articles, and along the boundaries of the Area, Customs Checkpoints and
Clearance Area shall be set up through which goods authorized to leave or enter the Area
from some destination inside or outside the Zone must pass, the boundaries of the Secured
Area may be expanded from time to time jointly by the JPDC, the Department of Finance,
and the Bureau of Customs and the Department of Interior and Local Government, with the
resolution of concurrence of the affected local government units, as the requirements of the
business in the Zone may demand or permit.

20. TCCP – the Tariff and Customs Code of the Philippines as amended

CHAPTER II
GENERAL PROVISIONS

A. AUTHORITIES AND RESPONSIBILITIES

1. AUTHORITY OF JPDC

The JPDC is responsible for the operation and management of the Secured Area of the
PPSEFZ, pursuant to Section 15 of the Act, the Rules and Regulations, and the provisions of
the Administrative Order. The JPDC is authorized to implement its own streamlined
procedures to ensure the free flow and movement of articles into, within and out of the
Secured Area, subject only to the limitation that articles introduced into the Customs
Territory shall be subject to the payment of applicable customs duties and taxes.

2. AUTHORITY OF CUSTOMS

Customs in the CCA and Customs in the Seaport Area, as a unit of the Bureau of Customs,
Department of Finance, working in coordination with JPDC, shall be responsible for:

a. Supervising and administering Customs operations involving the admission and removal of
articles to and from the PPSEFZ, and other Customs operations as determined by the
Commissioner of Customs, and
b. Establishing and maintaining offices within the premises of the Customs Clearance Areas
(PPSEFZ) wherever necessary to efficiently conduct Customs operations.

c. Maintaining and keeping of true and updated records of goods entering into and exiting
from the Secured Area of the Zone and all customs transactions made with regard to the
activities in the Zone, and for submission periodically or whenever required, to the Office of
the Commissioner of Customs.

d. To enable Customs to perform the above functions, the bringing out of the articles from
the Secured Area shall require the written permission from the JPDC Authority and the
Collector of Customs, which shall be monitored until the same is returned to the Secured
Area.

A Customs checkpoint at the boundary or boundaries of the PPSEFZ designated, as points of

entry shall be set up by Customs for the above purposes.

B. AUDIT, SEARCH, SEIZURE, AND ARREST IN PPSEFZ

1. AUDIT

Officials of JPDC and Customs are authorized to jointly conduct, at any time during office
hours, any audit, check or inventory count for the verification and reconciliation of the
accounts or records of any PPSEFZ Registered Enterprise

2. SEARCH

Persons, baggage, vehicles and cargoes entering or leaving the PPSEFZ may be subject to
search by Customs. However, Customs officials may, but only upon specific authority of the
Commissioner of Customs or the District Collector designated by him and with the assistance
and in the presence of JPDC officials or representatives, examine any articles held in the
PPSEFZ by any PPSEFZ Registered Enterprise or by any Resident, when a member of the
household is at home, for possible violations of Section 101 of the Tariff and Customs Code
of the Philippines and the pertinent provisions of this Administrative Order, provided, that
the Constitutional requirements for Search are met.

3. SEIZURE

Any prohibited or excluded articles found upon search, or through any examination, audit or
check of articles in the PPSEFZ by Customs in coordination with PPSEFZ may be seized for
the violation of the Tariff and Customs Code of the Philippines as amended, and endorsed to
the Customs for disposition in accordance with law.

4. ARREST

The JPDC shall, in coordination with or upon the assistance of Customs Officers in the Zone,
arrest person in the Zone for violations of the Tariff and Customs Code, as amended, for
which arrest is empowered under the law. Provided, however, that Customs may arrest
persons who violate the Tariff and Customs Code upon entering or leaving the Secured Area
of the Zone. It shall be the duly of the arresting officers to make known their official
character; the authority of exercising such power and to inform the person arrested the
cause of his arrest. Moreover, the arrested person must be afforded with all the rights
prescribed by law and to avail the demands of due process for the determination of his case.

C. RECORDS KEEPING

PPSEFZ Registered Enterprises bringing articles into the PPSEFZ are responsible for retaining
and maintaining records of permits, receipts, sales transfer, deliveries, and removals from
PPSEFZ of articles received by the Enterprise, and for maintaining accounts and inventory
records of articles brought into the PPSEFZ on a current basis and according to the
regulation and the generally recognized accounting principles and standards of the Republic
of the Philippines. The records shall provide an audit trail of the articles from the time of the
receipt by the PPSEFZ Registered Enterprise to the time the PPSEFZ Registered Enterprise is
relieved of responsibility for the articles according to the Rules and Regulations and the
provisions of the Administrative Order. Such records shall be retained for five (5) years. If
the record keeping system of the PPSEFZ Registered Enterprise has become impaired to the
point where no effective check audit or count of the inventory of the Enterprise can be
made by the JPDC, Customs, Bureau of Internal Revenue, Economic Intelligence and
Investigation Bureau (EIIB), or other authorized office, the JPDC may order a suspension of
the permit of the Enterprise. For its part, the Enterprise shall provide access to articles in its
premises and possession in the PPSEFZ, and to records pertaining thereto, which it is
responsible for maintaining under the Rules and Regulations, and the provisions of this
Administrative Order by authorized officials of JPDC, Bureau of Internal Revenue, or any
other government agency to which access is authorized by law and regulation.

D. BONDING OF CARRIERS

Carriers who undertake to transship foreign articles from PPSEFZ to a Customs Bonded
Warehouse within the Customs Territory shall be bonded in an amount to be determined by
the JPDC which in no case shall be less than Fifty Thousand Pesos (P50,000.00), conditioned
that the carrier shall transport and deliver, without delay and in accordance with the Rules
and Regulations in effect in the Customs Territory to the Collector of Customs at the point of
entry/destination. The provision of the Tariff and Customs Code, as amended, and its
implementing regulations shall govern the transshipment of foreign articles to and from the
PPSEFZ.

E. IMPORTATION OF RAW MATERIALS, CAPITAL GOODS, EQUIPMENT AND

CONSUMER ITEMS INTO THE PPSEFZ

Registered Enterprises and Bonafide Residents of the PPSEFZ are free to import raw
materials, capital goods, and equipment tax and duty-free provided that they shall be
covered by the corresponding Permit to Import issued by the JPDC Authority. Removal of
raw materials, capital goods, equipment and consumer items out of the PPSEFZ for sale to
non-PPSEFZ Registered Enterprises or persons shall be subject to the usual taxes and
duties, except as maybe provided herein.

F. RETAIL SALE OF CONSUMER ITEMS IMPORTED INTO THE PPSEFZ

1. The retail sale of tax and duty-free consumer items within the PPSEFZ shall be allowed in
duly authorized retail stores catering exclusively to PPSEFZ Overseas Filipino Workers and
Balikbayans as defined under RA No. 6768 and local and foreign tourists travelling to or
from foreign destinations under E.O. 97-A s. 1993 through the San Fernando Airport or
Seaport. Stores shall be subject to the joint regulation of Customs and JPDC to insure proper
accounting of imports and sales.

2. Non-resident of the PPSEFZ can purchase any consumer item on a retail basis from
hotels, restaurants and other retail facilities within PPSEFZ, provided that said items are
consumed within the PPSEF. For this purpose, all packages shall be opened or duly marked
at the point of (purchase) exit from the PPSEFZ.

CHAPTER III
ADMISSION AND RECEIPT INTO PPSEFZ

A. PROHIBITED MERCHANDISE

1. GENERAL

Any kind or class of articles may be admitted into the PPSEFZ from a foreign country, the
Customs Territory or a Customs Bonded Warehouse or Export Processing Zone within the
Customs Territory, except articles prohibited under the laws of the Republic of the
Philippines, executive orders and proclamation which may hereafter be enacted.

2. ARTICLES NOT IN ACCORDANCE WITH PERMIT TO IMPORT

Articles brought into the PPSEFZ which are not in accordance with the permit to import
issued by the JPDC to a Registered Enterprise or Resident shall be proceeded against
pursuant to the provisions of the Tariff and Customs Code of the Philippines and this
Administrative Order.

B. IMPORTATION OF ARTICLES DESTINED FOR CUSTOMS TERRITORY

Goods may be unladen in the PPSEFZ for the transshipment into the Customs Territory and
shall be transshipped under Customs supervision and control.

C. IMPORTATION AND TRANSHIPMENT OF PPSEFZ-DESTINED FOREIGN

MERCHANDISE

1. TAX AND DUTY EXEMPTION

Importations destined for the Secured Area of PPSEFZ, either for direct unloading or through
a port in the Customs Territory shall be exempt from the payment of all duties and taxes.

2. MARKING REQUIREMENT

Foreign articles destined for the PPSEFZ may be imported through any port in the Customs
Territory through which importation may be lawfully made. Except for foreign articles
arriving by mail or accompanying persons upon their arrival, the containers bearing the
foreign articles shall be marked “SHIP TO PPSEFZ, REPUBLIC OF THE PHILIPPINES” or with
similar wordings to show the Zone destination of the articles.

3. TRANSHIPMENT PROCEDURES

The transshipment of articles from port of discharge to the Secured Area shall be done in
accordance with the customs procedure. The Registered Enterprises or its authorized agent
will present the Admission Documentation to the Customs Office at the port of discharge. No
other authorization or approval will be necessary for the release of articles for transshipment
to the Secured Area of PPSEFZ.

D. ADMISSION PROCEDURE

1. RIGHT TO APPLY FOR ADMISSION

The application for admission of articles to the Secured Area of the PPSEFZ shall be made by
or on behalf of the owner or purchaser of the articles. The consignee shown on the bill of
lading or airway bill, or the addressee shown on mail packages, will be considered to be the
owner or purchaser, unless another person or firm presents evidence satisfactory to
Customs that it is the true owner or purchaser, or that it is requesting on behalf of and at
the specific request of the owner or purchaser. The application may be prepared by any
person who has the authority to sign the documents on behalf of the owner or purchaser. A
Resident or other person having possession of articles accompanying them upon arrival in
the Zone shall be considered the owner or purchaser of the articles.

2. IMPORT AUTHORITY

The admission application of PPSEFZ Registered Enterprise shall be made on forms provided
for and required by JPDC. The forms shall provide for description of the articles following the
convention provided under CMO 46-94. The admission application shall be presented at the
location designated by Customs, normally the Customs office nearest to the point of arrival
of the carrier or person bringing the articles at the Secured Area of PPSEFZ.

3. ACCOMPANYING IMPORT PERMIT

The import permit to be prepared by PPSEFZ Registered Enterprises or Residents shall be

accompanied by the Permit to Import, a commercial invoice, packing list, or other itemized
statement which describes the articles precisely and in commercial terms and serves as
audit trail into the records and accounts of the applicant. If the applicant is not the person
or enterprise shown as the consignee in the permit to import or in the other shipping
documents, the admission applicant shall also be accompanied by evidence to satisfactorily
demonstrate that the applicant is making the application on behalf of the eligible
owner/purchaser.

4. CUSTOMS REVIEW PROCEDURE

Customs officials shall review the import permit and, if necessary, examine the articles, to
verify the correctness of the information in the documentation.

a. Customs will review the import permit for completeness and accuracy. A copy of the
import permit shall be retained by Customs for compilation of statistics.

b. Customs will examine the articles as a condition of approving admission only:

(1) when the Commissioner or Collector of Customs has reason to believe information in the
admission documentation is incorrect
(2) when the Commissioner of the Collector of Customs has reason to believe that there has
been a violation of the law, regulations or the provisions of this Administrative Order
(3) under a program of random checks to test the quality of admission documentation
furnished to Customs

c. If Customs decide to examine the articles. The examination will be conducted in the
Customs Clearance Area, unless the Applicant requests the examination to be conducted in
his premises for justifiable reasons and subject to the approval of the Collector of Customs.

d. If no examination is to be conducted, Customs will check the condition of the vehicle

delivering the articles to the applicant’s premises and any seals affixed thereto, and note
any irregularities on the admission documents.

5. CUSTOMS RELEASE OF ARTICLES

If no irregularities are discovered through review of the documentation and any examination
conducted by Customs that require detention of the articles, Customs will release the
articles for delivery to the applicant’s premises in the PPSEFZ. The articles may be delivered
by:

a. the vehicle which brought the article to the Secured Area of the PPSEFZ
b. a vehicle owned or leased by the applicant, or
c. a vehicle of a firm licensed by the JPDC Authority for the purpose of carriage of articles
within the Secured Area of the PPSEFZ.

E. EXEMPTION FROM IMPORT PERMIT

Except upon special order of the JPDC but without any limitation on Customs Search
Authority of vehicles, persons, baggage, or cargoes (arriving) leaving the Secured Area of
the PPSEFZ, no declaration of admission or permit by either Customs or the JPDC is required
for admission to the Secured Area of the PPSEFZ of:

1. Any personal effect of residents or the PPSEFZ valued at less than One Hundred Dollars
(US$100)

2. Any article of foreign origin any shipment valued at less than Five US Dollars (US$5)

3. Articles for delivery to a vessel or aircraft for loading and exportation to a foreign country
from the PPSEFZ

4. Articles being returned to the Secured Area of the PPSEFZ after their temporary transfer
from the Secured Area of the PPSEFZ to the Customs Territory under the procedures
allowed herein

5. Domestic articles, not covered by any of the preceding exemptions when the person or
enterprise presenting the articles for admission surrenders to Customs a commercial invoice
or similar document describing the articles in commercial items, along with a declaration
that the articles are domestic articles as provided in the regulations of Customs in force in
the Customs Territory.

F. POSTAL IMPORTATIONS
Articles arriving by mail, or parcel post at a postal facility within the Secured Area of the
PPSEFZ shall be released by Customs after completion of the required admission procedure,
for delivery by postal officials to the addressee.

G. CUSTOMS BONDED WAREHOUSES OR EXPORT PROCESSING ZONES

Articles may be admitted into the Secured Area of the PPSEFZ from a Customs Bonded
Warehouse or Export Processing within the Customs Territory Containers of the said
merchandise shall be clearly marked “SHIPPED FROM (NAME OF CBW OR EPZ
ENTERPRISE/NAME OF CBW OR EPZ) DESTINED TO PPSEFZ” or similar wordings to show
both the origin and destination of the shipment. Acceptance and acknowledgment of
authorized receipt by a PPSEFZ Registered Enterprise in the PPSEFZ shall constitute
fulfillment of the obligation for safe delivery from the sending Customs Bonded Warehouse
or Export Processing Zone to the Secured Area of the PPSEFZ.

H. LEGIBILITY FOR DRAWBACK, BOUNTY OR EXEMPTION

The signed permit and release by Customs for the admission of foreign articles into the
Secured Area of the PPSEFZ and conclusive proof of actual exportation therefrom as
required under pertinent customs laws, rules and regulations shall be the basis for
consolidation to prove exportation. The provisions of laws, rules and regulations
implementing drawbacks or zero-rating, shall be complied with in case of claims thereof.

CHAPTER IV
OPERATION AND HANDLING WITHIN THE PPSEFZ

A. ANNUAL INVENTORY, RECONCILIATION AND REPORT

Each PPSEFZ Registered Enterprise shall conduct an annual physical inventory at the end of
its business year of all articles in its premises and its possession in the PPSEFZ, and
reconcile any discrepancies found with its inventory. Such reconciliation shall be made to the
JPDC on a form to be required by it, copy furnished the Bureau of Customs, within ninety
(90) days after the end of the business year, along with any payment of duties and taxes for
shortages or admission documents for overages.

B. LOSS OF IDENTITY OF DOMESTIC ARTICLES

Domestic articles that have lost their identity as such in the PPSEFZ shall be treated as
foreign articles if they are transferred to the Customs Territory. They will be considered as
having so lost their identity if they cannot be identified by Customs as domestic articles on
the basis of examination of the articles or consideration of any proof presented by the
PPSEFZ Registered Enterprise, including the accounting and inventory records of the
Enterprise.

CHAPTER V
TRANSFER OF ARTICLES FROM PPSEFZ

A. ARTICLES FOR TRANSFER FROM PPSEFZ

Any article which has, been admitted to or produced in the Secured Area of the PPSEFZ may
be transferred therefrom for exportation, transshipment through Customs Territory,
transportation to a Customs Bonded Warehouse or an Export Processing Zone within the
Customs Territory, or transfer to the Customs Territory for consumption subject to existing
Rules and Regulations.

B. JPDC PERMIT TO TRANSFER

1. Except as specified below, articles shall not be transferred from the Secured Area of the
PPSEFZ without the joint permit of the JPDC and Customs. Forms and procedures used for
transfers from the PPSEFZ shall provide therein for such permit.

Domestic articles which have not been manufactured, blended or otherwise combined in the
PPSEFZ with foreign articles, when the person or enterprise presenting the articles for
removal from the PPSEFZ surrenders to Customs a commercial invoice or similar document
describing the articles in commercial terms along with a declaration that the articles are
domestic articles as provided in the provisions of this Administrative Order are exempted
from the permit requirement and from Customs entry procedures after examination and
verification conducted by Customs and if allowed under the pertinent provisions of the Tariff
and Customs Code of the Philippines, except where such a permit is required under special
order of the JPDC.

2. Carriers containing such articles are nevertheless subject to search by Customs upon
removal from the PPSEFZ and PPSEFZ Registered Enterprises shall maintain and produce
records of the transfer and removal of exempted articles.

C. TRANSFER FOR CONSUMPTION IN CUSTOMS TERRITORY

Foreign articles, or articles containing foreign article components, in the PPSEFZ may be
transferred to Customs Territory under the laws, regulations and procedures applicable in
the Customs Territory unless otherwise provided in this Administrative Order.

ASSESSMENT OF DUTIES AND TAXES

Customs and import duties shall be assessed on foreign articles or articles containing foreign
component at the time of its transfer from the PPSEFZ to the Customs Territory in
accordance with the Tariff Classification and Customs Valuation procedures established
under the Tariff and Customs Code of the Philippines.

D. TEMPORARY TRANSFER TO CUSTOMS TERRITORY

1. ELIGIBLE PURPOSES

Foreign articles which have been admitted to the PPSEFZ may be removed temporarily from
the PPSEFZ for service which are not available in the PPSEFZ, such as repair, restoration,
testing and similar operations. Articles may be temporarily removed from PPSEFZ for
production process not available in the PPSEFZ subject to the Rules and Regulation
applicable in the Customs Territory.

2. APPLICATION

A person or enterprise, which has received a permit from the JPDC for temporary transfer,
shall present to the Customs the article and the application on a form to be required by the
latter for review and examination.
3. TIME AND GEOGRAPHIC LIMITS

Upon issuance of a Customs permit, the article maybe transferred from the PPSEFZ for a
period of not more than four (4) months unless the period is extended for another four (4)
months by the JPDC and for a valid business reason. The articles maybe transferred to any
place within the Customs Territory for the conduct of the service of operation. The article
may not be entered for consumption or exported while it is in temporary transfer status in
the Customs Territory, unless duties and taxes are paid where applicable.

4. RETURN TO PPSEFZ AND ENFORCEMENT MEASURES

Upon its return to PPSEFZ, the original permit and the articles shall be presented to Customs
for examination and review. If the articles are not returned within the four (4) months
period, plus any extension granted by the JPDC, or not handled in accordance with the
provisions of this section, the articles are considered to have transferred to the Customs
Territory without proper permit, and will be subject to duties and taxes and any
enforcement action authorized under the provisions of this Administrative Order.

E. EXPORTATION FROM THE PPSEFZ

1. EXPORTATION FROM CUSTOMS TERRITORY THROUGH PPSEFZ

Foreign or domestic articles may be brought into the PPSEFZ from the Customs Territory for
the purpose of loading onto (helicopters) vessels or aircraft arriving in the PPSEFZ. Such
articles shall be supervised by Customs to assure their exportation from the PPSEFZ. If they
are not exported or returned to the Customs Territory within three (3) months, the articles
shall be turned-over to Customs for disposal in accordance with the Tariff and Customs
Code of the Philippines, as amended and from the proceeds shall be deducted any and all
expenses incurred, by the JPDC in connection therewith as may be allowed by law.
However, in all other respects, the Customs Laws and Regulation shall govern the articles as
if it were being exported from the Customs Territory.

2. TRANSHIPMENT THROUGH CUSTOMS TERRITORY FOR EXPORTATION

Foreign articles, or articles containing foreign articles components in the PPSEFZ may be
transferred to other ports in the Customs Territory for delivery to vessels and aircraft for
exportation under the supervision of Customs using the forms and procedures applicable for
exportation in the Customs Territory. However, Customs officials will not usually inspect or
examine PPSEFZ articles destined for exportation. Upon arrival at the port of exportation
and while awaiting loading onto the exporting vessel or aircraft, the articles will remain
unopened in the original packing containers and under Customs or the original PPSEFZ
shipper’s seal. Customs officials will deviate from this policy only in the most unusual
circumstances, which will be clearly documented and justified to the JPDC and PPSEFZ
Registered Enterprise.

3. MARKING OF CONTAINERS FOR EXPORTATION

Except in the case for exportation from the PPSEFZ by mail, accompanying persons, or
under the Special Retail Sales Regime, containers or articles destined for exportation,
whether directly from the PPSEFZ or transshipped through the Customs Territory, shall be
clearly marked, “SHIPPED FROM PPSEFZ, REPUBLIC OF THE PHILIPPINES” or similar
wordings to show the zone origin of the shipment.
4. EXPORTATION OF CONSUMER ITEMS

a. Foreign tourist and residents who purchase consumer items may export the articles
accompanying them upon departure to foreign country on a vessel or aircraft, which they
board from a designated port of exit. The itemized listing provided by the retail seller under
the provision of this Administrative Order should contain the JPDC permit to export the
articles and the customs export documentation for the articles.

b. Persons who board vessels or aircraft in the Customs Territory shall present to Customs
at the point of exit from PPSEFZ.

(1) The articles to be exported

(2) The itemized listing provided by seller, and
(3) A declaration of any foreign articles consumed in the PPSEFZ

The articles to be exported will be placed in a special sealed container provided by the seller
of the articles for shipment of the articles to the vessel or aircraft the purchaser is to board.
The seller will be responsible for the delivery of the merchandise, under the supervision of
the Customs, to the purchaser in the Customs Territory immediately prior to the departure
of the vessel or aircraft for exportation to a foreign country, and for the payment of any
duties, taxes or penalties due on any merchandise that is not properly delivered and
exported.

c. Articles previously exported from the PPSEFZ to foreign country and subsequently re-
imported may be admitted into the PPSEFZ as foreign articles in the manner provided in
Chapter III, Section C. of the Administrative Order. Foreign Articles, or articles containing
foreign article components which are exported to a foreign country and subsequently re-
imported directly into Customs Territory for consumption shall be treated in the same
manner.

F. ARTICLES FOR USE ON AIRCRAFT OR VESSEL

Foreign articles, or articles which are reasonably necessary for use of vessels or aircraft
arriving or departing from the PPSEFZ for their voyage flights outside the Philippines or
otherwise engage in foreign trade may be delivered free of duties and taxes to aircraft or
vessel for use or consumption on board by the crew or passengers, as fuel or as equipment
or for repair of the aircraft, to the same extent as is authorized under the laws and
regulations in effect in the Customs Territory. The article will be considered transferred from
the PPSEFZ upon signature of receipt of the articles by an authorized official of the aircraft
with the intent to use them on board the aircraft from the PPSEFZ.

G. TRANSFER TO CUSTOMS BONDED WAREHOUSE EXPORT PROCESSING ZONE

Foreign or domestic articles may be transferred from the PPSEFZ for transshipment to a
Customs Bonded Warehouse or Export Processing Zone in the Customs Territory and receipt
therein, under the laws, regulations and procedures in effect in the Customs Territory.
However, containers of such articles shall be clearly marked “SHIPPED FROM PPSEFZ,
DESTINED FOR (NAME OF CBW, OR EPZ ENTERPRISE/NAME OF CBW OR EPZ)” or with
similar wordings to show both the origin and destination of the shipment.

H. DELIVERY AND REMOVAL FROM THE PPSEFZ

1. Customs shall require that vehicles containing shipments of foreign articles containing
foreign article components, transshipped to Customs Territory be sealed by the Customs
seal, or with a shippers seal, approved by Customs, and transferred under customs
supervision and control.

2. The articles may be transferred from the premises of the PPSEFZ Registered Enterprise to
the Customs Territory using the carrier of the PPSEFZ Registered Enterprise or the carrier
licensed by the JPDC for the purpose.

3. Passenger vehicles, including buses, taxicabs or other vehicles for hire, may be subject to
Customs inspection and search to allow persons to properly declare purchase made in the
PPSEFZ for transfer to the Customs Territory and to detect undeclared merchandise. Points
of exits shall contain adequate facilities to pull aside vehicles for Customs search, to hold or
store detained or seized articles and to assess and collect duties and taxes.

4. When foreign articles, or articles containing foreign article components, are examined at
the premises of a PPSEFZ Registered Enterprise and for which a permit to transfer from the
PPSEFZ is issued, or in other situations where the permit is given at a location other than
the point of exit, Customs shall establish controls, such as escorts, gate passes, sealing or
other devices, to assure that the articles for which a permit to transfer has been issued are
duly and properly removed from the PPSEFZ, and that the articles without such a permit are
not removed from the PPSEFZ.

5. A person or Enterprise which has received a Customs permit for transfer or articles from
the PPSEFZ shall see to it that the articles are physically removed from the PPSEFZ within
seven (7) calendar days from its issuance, or request the withdrawal or cancellation of the
application for transfer. Except by special order of JPDC to the contrary, foreign articles or
articles containing foreign components, shall not be entered for consumption in the Customs
Territory, but retained in the PPSEFZ if the request for transfer is withdrawn or cancelled.
The PPSEFZ Registered Enterprise shall assume responsibility for the articles, and any duty
or tax paid are refunded by Customs in accordance with its procedures. If the request for
transfer is not withdrawn or cancelled and there has been no special permit by the JPDC for
the retention of the articles but the same nevertheless remained in the PPSEFZ, any duty
and tax paid will be treated as unclaimed and turnover to the JPDC for disposition.

I. RETURN TO PPSEFZ WITHOUT ENTRY TO COMMERCE

If foreign articles or articles containing foreign article components are transferred to the
Customs Territory with the intent of returning them to the JPDC without having entered the
commerce of the Republic of the Philippines or circumventing the removal of the
requirements provided in the provision of this Administrative Order, and the articles are so
returned to the PPSEFZ, the original permit to transfer and entry shall be cancelled, and the
PPSFZ Registered Enterprise which transferred the articles from the PPSEFZ shall reassume
responsibility of the articles as foreign articles.

CHAPTER VI
ENFORCEMENT OF REGULATIONS

A. PENALTIES
Any person or enterprise found to have violated any provision of the Act of this
Administrative Order should be subject to the pertinent penal provisions of the Tariff and
Customs Laws of the Philippines.

B. EFFECTIVITY

This Administrative Order shall take effect fifteen (15) days after publication in the Official
Gazette or in any newspaper of general circulation. Certified copies of this Customs
Administrative Order shall be submitted to the U.P. Law Center pursuant to Book VII,
Chapter II, Sections 3 and 4 of the Revised Administrative Code of 1987.

(SGD)
TITUS B. VILLANUEVA
Commissioner

APPROVED:

(SGD)
JOSE ISIDRO N. CAMACHO
Secretary of Finance