CAO 16-2019: Government's Right of Compulsory Acquisition

Vocabulary flashcards covering Customs Administrative Order (CAO) 16-2019 regarding the Government's Right of Compulsory Acquisition, including key definitions, procedures, badges of undervaluation, and appeal timelines.

Compulsory Acquisition

A power of the government to acquire imported goods when Customs determines that their declared customs value is unconscionably low.

Duty Benchmark

The practice of paying uniform duty on certain categories of goods disregarding the quality, quantity, and the actual value of the goods.

Public Auction

A public sale of goods by the Bureau in accordance with the Bureau of Customs and Commission on Audit’s rules and regulations.

Undervaluation

Wrongful declarations committed when the declared value fails to disclose in full the PAPP or any dutiable adjustment to the PAPP, or when an incorrect valuation method is used or valuation rules are not properly observed, resulting in a discrepancy in duty and tax to be paid between the legally determined correct value and the declared value.

Badges of Undervaluation

Indicators showing undervaluation, including Duty Benchmarking, information from customs administrations of other countries, valid industry complaints or recommendations from recognized organizations/chambers, and other evidence showing an unreasonably low declared value (discrepancy of at least $30\%$ in the value declared).

Notice of Compulsory Acquisition (NCA)

The preliminary order issued by the Commissioner identifying the goods subject for Compulsory Acquisition, which ripens into a Warrant of Compulsory Acquisition (WCA) upon affirmation of the Commissioner's decision or final resolution of an appeal.

Warrant of Compulsory Acquisition (WCA)

The decision of the Commissioner to acquire the goods subject for Compulsory Acquisition for a price equal to their declared customs value plus any duties already paid on the goods.

Authority to Exercise Compulsory Acquisition

The sole authority held by the Commissioner of Customs to exercise compulsory acquisition, initiated either motu proprio (on the Commissioner's own initiative) or upon recommendation of the District Collector.

Timeline for Commissioner Action on Recommendation

The period within which the Commissioner must act on the District Collector's recommendation to issue an NCA: within $48\text{ hours}$, and within $24\text{ hours}$ in the case of perishable goods (deemed denied if no NCA is issued within the period).

Compulsory-Acquisition Proceedings Timeline

The statutory timeframe under CAO providing that the Bureau conducts proceedings within $3\text{ working days}$ after issuance of the NCA, and the Commissioner renders a decision within $5\text{ working days}$ from the termination of the proceedings.

Payment to Importer under WCA

Payment made in cash within $10\text{ working days}$ from the issuance of the WCA, based on the declared customs value plus duties already paid.

Appeal to the Secretary of Finance

An appeal remedy available to an importer within $20\text{ working days}$ from receipt of the WCA or notice of the Commissioner's decision.

Appeal to the Court of Tax Appeals (CTA)

An appeal remedy available to the importer within $30\text{ calendar days}$ if the Secretary of Finance affirms the Commissioner's decision.

Modes of Disposition

The permissible methods to dispose of acquired goods once acquisition becomes final: public auction, negotiated sale, or another mode allowed under the CMTA and applicable regulations.