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Custom Administrative Order

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REPUBLIC OF THE PHILIPPINES Department of Finance BUREAU OF CUSTOMS 1099 Manila 12 May 2008 CUSTOMS ADMINISTRATIVE ORDER No._______________ SUBJECT: ESTABLISHING THE AUTHORIZED ECONOMIC OPERATOR (AEO) PROGRAM, TO BE KNOWN AS CUSTOMS-TRADE PARTNE..

    REPUBLIC OF THE PHILIPPINES

    Department of Finance

    BUREAU OF CUSTOMS

    1099 Manila

     12 May 2008

    CUSTOMS ADMINISTRATIVE ORDER

    No._______________

    SUBJECT: ESTABLISHING THE AUTHORIZED ECONOMIC OPERATOR

    (AEO) PROGRAM, TO BE KNOWN AS CUSTOMS-TRADE

    PARTNERSHIP TO PROTECT AND ACCELERATE TRADE OR

    C-TAPAT PROGRAM

    Pursuant to Section 608 of the Tariff and Customs Code of the Philippines,

    as amended (TCCP), the following rules and regulations are hereby promulgated:

    1.0 OBJECTIVES

    1.1 To comply with the commitment of the Philippines to implement

    the World Customs Organization (WCO) Framework of Standards to

    Secure and Facilitate Global Trade (SAFE Framework, for brevity)

    1.2 To establish a voluntary certification program to be known as

    Customs-Trade Partnership to Protect and Accelerate Trade or C-

    TAPAT consistent with the WCO’s AEO Program which shall be

    administered by the Bureau of Customs (BOC) to help certain

    economic operators in the international supply chain adopt

    acceptable control measures to enhance the security of such chain

    1.3 To enhance BOC-Business partnership on trade security and trade

    facilitation based on trust and mutual respect

    1.4 To establish accreditation procedures that offer certain benefits and

    incentives to certain economic operators considered as BOC’s

    trusted partners

    2.0 SCOPE AND PHASE OF IMPLEMENTATION

    2.1 This Order shall apply initially to importers, next to exporters and

    later on to other economic operators in the international supply

    chain.

    2.2 This Order shall be implemented in phases beginning with a pilot

    project covering with limited number of importers already

    accredited as Super Green Lane (SGL) importers under CAO 2-2000,

    as amended by CAO 6-2003, that may apply and qualify under the

    guidelines provided hereunder and the implementing rules and

    regulations for the effective implementation of this Order.

    2.3 As far as practicable, small and medium enterprises (SMEs) may be

    covered by this Order.

    3.0 GENERAL PROVISIONS

    3.1 The Commissioner of Customs shall constitute a Committee headed

    by a Deputy Commissioner in charge of the accreditation of AEO’s

    that shall perform such other functions as may be assigned by the

    Commissioner from time to time.

    3.2 Economic operators interested to join the C-TAPAT Program are

    required to:

    3.2.1 Have security management systems;

    3.2.2 Conduct risk assessment of their business operations;

    and

    3.2.3 Implement the stipulated security measures under this

    Order to secure their supply chains

    3.3 The summary of security management system shall contain the

    following information:

    3.3.1 The company’s security policy, security objectives and

    commitment to security;

    3.3.2 The procedures for ensuring that pertinent security

    management information is communicated to and from

    relevant employees and other stakeholders; framework

    for effective communication within the company;

    3.3.3 The procedures for the review of the company’s security

    profile at planned intervals, to ensure its continuing

    suitability, adequacy and effectiveness; and

    3.3.4 Any other relevant information.

    3.4 The summary of risk assessment shall contain the following

    information:

    3.4.1 A flow chart to illustrate the company’s risk assessment

    process;

    3.4.2 The risks and vulnerabilities identified from the

    company’s risk assessment process;

    3.4.3 The countermeasures put in place to reduce the

    identified risks and vulnerabilities;

    3.4.4 When the risk assessment was conducted;

    3.4.5 Who conducted the risk assessment; and

    3.4.6 Any other relevant information.

    3.5 The security measures under this Order comprise eight (8)

    elements that a company must address:

    3.5.1 Premise security and access controls;

    3.5.2 Personnel security;

3.5.3 Business partner security;

    3.5.4 Cargo security;

    3.5.5 Conveyance security;

    3.5.6 Information and Information Technology (IT) security; 3.5.7 Incident management and investigations; and 3.5.8 Crisis management and incident recovery.

    3.6 Application for the C-TAPAT Program shall include the following:

3.6.1 Duly filled up Application Form

    3.6.2 The company’s security profile which comprises the

    following:

    3.6.2.1 A summary of the company’s security

    management system;

    3.6.2.2 A summary of the company’s risk assessment

    process; and

    3.6.2.3 Security measures put in place by the company to

    enhance the security of the company’s supply

    chain.

3.6.3 Supporting documents which include:

    3.6.3.1 Process map(s) that illustrates the flow of goods

    and documentation / information through the

    company’s supply chain.

    3.6.3.2 Site plan(s) that shows the layout of the

    company’s premises and clearly identifies all

    perimeters, access areas, buildings, structures,

    security and access controls.

3.6.4 Copy of the company’s relevant security accreditations;

    and

    3.6.5 Any other relevant supporting documents.

    3.7 Aside from the consequent benefits resulting from the implementation of robust security measures in the forms of increased visibility of goods in the supply chain, reduction in pilferages and greater efficiency in their supply chain management, companies accredited under the C-TAPAT Program shall be recognized as trusted partners by the BOC and shall be entitled to the following benefits:

    3.7.1 Super Green Lane privilege to qualified shipments with

    pre-clearance on values and classifications and random

    inspections at the trusted partners’ premises;

    3.7.2 Renewal of accreditation as importer not on an annual

    basis but for a longer period;

    3.7.3 Last priority on post-entry audit;

    3.7.4 Recognition as a low risk company i.e. enhanced

    branding;

    3.7.5 Reduced inspection or expedited clearance by other

    Customs authorities should certified status be also

    recognized by overseas countries under a mutual

    recognition program or multilateral arrangement; and

    3.7.6 Such other trade facilitation benefits that may be

    afforded by BOC under existing laws and regulations.

    3.8 In addition to the terms and conditions stated in the Application

    Form, a trusted partner under the C-TAPAT Program shall have the

    following responsibilities:

    3.8.1 To update BOC as and when there are significant

    changes to the company’s security profile;

    3.8.2 To submit an annual statement of commitment; and

    3.8.3 To inform BOC of any non-conformities by the company

    with C-TAPAT Guidelines;

    3.8.4 To renew its accreditation as trusted partner every two

    (2) years

    3.9 Accreditation under the C-TAPAT Program shall be suspended

    and/or revoked if:

    3.9.1 The company does not abide by the terms and conditions

    of the C-TAPAT certification; or

    3.9.2 There is non-compliance by the company with Philippine

    Customs laws and regulations and/or with the laws and

    regulations of other relevant Philippine government

    authorities; or

    3.9.3 Supply chain security weaknesses in the company or

    nonconformity by the company with this Order and its

    Implementing Rules and Regulations are discovered and

    not rectified to BOC’s satisfaction; or

    3.9.4 The company opts to withdraw from the program.

    3.10 A company can lodge an appeal against a BOC decision denying a

    company’s application and participation in the C-TAPAT Program by

    lodging its appeal with the Secretary of Finance within 15 calendar

    days from the date of receipt of the relevant decision

    communicated to the company by BOC.

    3.11 The business documents/information are for BOC purposes only

    and will not be disclosed to a third party without the companies’

    prior written consent. All business documents/ information provided

    by the companies will remain confidential.

    4.0 IMPLEMENTING RULES AND REGULATIONS

    The Commissioner of Customs, upon due consultation with the private

    sector/stakeholders, shall issue the necessary rules and regulations for the

    effective implementation of this Order.

5.0 REPEALING CLAUSE

    All Orders, Memoranda, Circulars or parts thereof, which are inconsistent with this Order, are deemed revoked, amended and/or modified accordingly.

6.0 SEPARABILITY CLAUSE

    If any part of this Order is declared by Courts as unconstitutional or contrary to existing laws, the other parts not so declared shall remain in full force.

7.0 EFFECTIVITY

    This Order shall take effect fifteen (15) days after publication in a newspaper of general circulation.

     NAPOLEON L. MORALES

     Commissioner

    APPROVED:

    MARGARITO V. TEVES

     Secretary

     Department of Finance

    __________, 2008

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