Pre-Border Verification and E-Invoicing Enhance Import Security Standards
To simplify customs procedures, a Joint Administrative Order outlining the guidelines to implement a digital and integrated system for the pre-border technical verification and cross-border electronic invoicing of all imported commodities, as provided by Administrative Order (A.O.) No. 23, series of 2024, was issued by the Department of Finance, Department of Agriculture, Department of Trade and Industry, Department of Energy, Department of Health, Department of Environment and Natural Resources, Department of Information and Communications Technology, Bureau of Customs, and Philippine Drug Enforcement Agency.
The Pre-border technical verification (PTV) and cross-border electronic invoicing (CEI) aims to strengthen national security, safeguard consumers’ rights, and protect the environment against sub-standard and dangerous imported goods. These are enhancements towards a more transparent and predictable customs procedure that adheres with international standards.
PTV refers to testing and inspection of all commodities by accredited testing, inspection, and certification companies (ATICC) prior to exporting to the Philippines for purposes of verifying in advance the declared specifications, description, weight, volume, country of origin, and other requirements. It is designed to ensure that these goods conform to Philippine safety and quality standards and technical regulations.
CEI is a system used by a verified and registered foreign exporter to create export invoices on a single electronic platform owned, controlled, and maintained by the Philippine Government. Its purpose is to effectively monitor international trade transactions of all important goods.
As the primary government entity responsible for implementing customs procedures, the Board of Customs is directed to implement the PTV and CEI System within two (2) years from the effectivity of A.O No. 23.
Significant provisions under the guidelines are summarized below:
Pre-border Technical Verification
- Coverage
All containerized agricultural products, non-agricultural products with health and safety issues, and other goods susceptible to misdeclaration to avoid duties and taxes, are required to undergo Pre-border Technical Verification.
The following are not subject to pre-border technical verification:
- Goods which are already covered under the BOC Bulk and Break-Bulk Cargo Clearance Enhancement Program;
- Goods shipped in Less Container Load (LCL);
- Balikbayan boxes and personal and household effects of returning residents;
- Goods where the consignee is the Government of the Republic of the Philippines; or any of its corporations , agencies or instrumentalities but not including goods imported on behalf of these instrumentalities by private importers;
- Explosives, ammunition, arms and equipment and other strategic materials certified as such by the Department of National Defense;
- Imports by export processing zone enterprises duly registered with Export Processing Zone Enterprises; and
- Importations and donations made by foreign governments or international organizations to foundations, charities and recognized humanitarian organizations.
- Engagement of a PTV Accredited Testing, Inspection, and Certification Companies (ATICC) and Issuance of Certificate of Conformity
The PTV ATICC shall inspect the goods requiring PTV and issue a Certificate of Conformity or a Discrepancy Report, whichever is applicable. Goods that have undergone PTV and have been issued a Certificate of Conformity shall be qualified for advance clearance procedure subject to certain conditions.
Cross-border Electronic Invoicing
- Coverage
All goods imported, whether by air or sea, shall be subject to the Cross-border E-Invoicing.
- Registration
All exporters of goods to the Philippines are required to apply for registration in the CEI System annually. Exporters must provide information and documentation related to their company to be verified and registered by the ATICC. Upon registration, the exporters shall be issued a digital certificate for the purpose of signing the e-invoices.
- Creation of E-Invoices
Registered exporters shall create e-invoices through the CEI System prior to exportation of the goods. They shall sign the e-invoice using the digital certificates issued through the CEI system. Upon creation of the e-invoice, the same shall be shared transparently and in real time with the Bureau of Customs, Bureau of Internal Revenue, Department of Agriculture, Department of Trade and Industry, Department of Environment and Natural Resources, Department of Energy, Department of Health, and Philippine Drug Enforcement Agency. The e-invoice shall be available for downloading by the BOC for integration with the Customs Management System.
Non-compliance with PTV and CEI
Goods without an e-invoice, have not undergone PTV, when required, and those that have been issued a Discrepancy Report due to discrepancies in the e-invoice shall be considered High-Risk subject to 100% physical inspection by the ATICC, concerned regulatory agency, and the Bureau of Customs, continuous underguarding until accomplishment and submission of a Border Technical Verification (BTV) Report, other applicable control, and payment of duties, taxes, and penalties due on the shipment, including administrative fines. Goods that have health and environmental issues, shall be exported back to the country of origin at the expense of the importer.
Failure to subject the shipment to PTV or CEI shall be subject to penalties, which are without prejudice to the imposable administrative, criminal and civil penalties and fines for violations of other regulatory laws, rules and regulations.
Other Provisions
The JAO further provides for the accreditation procedures and monitoring and review of performance of testing, inspection, and certification companies, and enumerates the roles of responsibilities of the Committee on Pre-border Technical Verification and Cross-border Electronic Invoicing (CPTVCEI), the member agencies, importers, exporters, and ATICC.
The full text of the guidelines may be read here.