BOC eyes P2M escrow deposit for deconsolidators

• BOC is holding a public consultation on Nov 13 on a revised draft order to register sea cargo deconsolidators

• Under the revised draft, deconsolidators must deposit P2 million in escrow, plus P500,000 for each consolidator in each country of operation

• The registration fee rises to P10,000 from P2,000, but the certificate is now valid for three years instead of one

The Bureau of Customs (BOC) has revised its proposed rules on registering sea cargo deconsolidators and on how they deal with the bureau. The new draft raises the registration fee and changes how deconsolidators must guarantee payment of duties and taxes.

In a notice dated Nov 6, BOC asked stakeholders to submit position papers and join a public consultation on Nov 13 on the draft customs administrative order (CAO). A similar draft was released for comment in 2024.

What changed from the 2024 draft

The 2024 cash bond was held in a special trust account. Under the new draft, the deconsolidator and BOC would open an escrow account with the trust department of a bank nominated by the bureau. The escrow would guarantee payment of duties, taxes and other charges, and the performance of obligations tied to importing balikbayan boxes.

Who is covered

The draft covers deconsolidators, defined as local freight forwarders doing business in the Philippines as a subsidiary, parent company or branch of a consolidator. They ungroup consolidated shipments for distribution, including balikbayan boxes, loose cargo and breakbulk, and commercial shipments, by sea.

The proposed CAO aims to set out the obligations and liabilities of deconsolidators and their consolidator counterparts for consolidated shipments, including balikbayan boxes, to protect the public. It is drafted in relation to CAO 1-2018 on consolidated balikbayan box shipments, CAO 6-2019 on the registration of third parties dealing with BOC, and CAO 7-2022 on the accreditation of importers.

READ: BOC, CFO sign pact to help OFWs safeguard balikbayan boxes

Other requirements in the draft

• Deconsolidators must register with BOC’s Accounts Management Office, or another office the Customs commissioner designates, and then with the Client Profile Registration System. Those already accredited by other agencies must still register with BOC.
• Deconsolidators handling balikbayan boxes must keep an affiliate consolidator in the country of origin and submit their service contracts with their consolidators.
• When they transact with BOC for importers and consignees, deconsolidators are treated as the true importers or consignees, with the same responsibilities and penalties under CAO 7-2022.
• BOC must publish lists of registered consolidators and deconsolidators with their areas of operation, and a separate list of those whose registration is suspended. It must tell other agencies and parties such as shipping lines about suspensions or blacklisting.
• BOC must also set up or acquire a system to monitor balikbayan box shipments, including those using the duty- and tax-exempt privilege under Section 800(g) of the Customs Modernization and Tariff Act.
• Forwarders handling cross-border e-commerce shipments will be covered by a separate regulation.

Aside from the 2024 draft, similar rules through a customs memorandum order was also drafted in 2023. 

READ: 5 more forwarders face raps over abandoned balikbayan boxes