When we speak of imports, we speak of foreign goods and services bought from another country and to be utilized in another country. This includes personal, commercial, and business use.
The word “import” is derived from the word “port;” since goods are often shipped via boat to foreign countries. However, in our time, it doesn’t matter what the imports are or how they’re sent. They can be shipped, sent by mail; some even hand-carries in luggage on a plane. If they are produced in a foreign country and are sold/used domestically, they are imports.
Importing goods can help businesses meet its goals and provide goods to customers which may not be available locally. Even some tourism products and services are imports. If for instance you take a trip outside the country and you buy products and services and you bring it in the Philippines, you are importing those souvenirs.
Importance of certain commodities into the Philippines is regulated or prohibited for the following reasons:
- Public health and safety;
- National security;
- International commitments; and;
- Development/rationalization of local industry.
Goods that are commonly imported are:
- Cosmetic material/s
Application for Registration of Importers
Importers can file at the Customs Intelligence and Investigation Service (CIIS).
In 2014, the Department of Finance (DOF) issued the Department Order 012-2014 (1). This is a two-segment accreditation process for those who import. With this, all declared importers (organization or individual brokers) are now required to secure:
1. Bureau of Internal Revenue (BIR) Importer Clearance Certificate (BIR-ICC)
2. Bureau of Customs (BOC) and Account Management Office (AMO) accreditation
Before we get to the documentary requirements, importers are expected to meet the following criteria:
- An existing head office or principal place of business in the Philippines (with SEC registration)
- Fully compliant with BIR registration/s
- Must have NO cases of returns and payments of tax;
- Record of any account receivable and delinquent account; and;
- Record of any pending tax or related criminal case
- They must also have regular usage of the electronic filing and payment system (eFPS) in filing all requisite tax returns and in the payment of taxes
- Lastly, the regular submission of all information returns.
So, how can you file for your imports to be distributed legally?
1. All importers whose Head/Principal Office are located in Metro Manila shall file their application form with the Office of the Assistant Service Director for Administration, CIIS.
2. Importers whose Head/Principal Offices are located OUTSIDE Metro Manila shall register with the Office of the District Collector of the Port/Sub-Port Collector under whose jurisdiction the physical location of the Head/Principal Offices of the applicant(s) is/are located.
3. After the documents have been submitted by the applicant, the folder shall be assigned to an agent to conduct the necessary validation/verification.
4. Once the application is approved by the Director, the applicant shall be issued a Certificate of Registration with an assigned Registration Number.
The Documentary Requirements include:
- The Mayor’s Permit
- VAT or non-VAT certificate of applicant
- TIN Card of the company/enterprise; its directors and principal officers (CEO, CFO and Import-Export Officer, Proprietor or Partner)
- For corporations, articles of incorporation and by-laws;
- For partnerships, articles of partnership and by-laws;
- Cooperatives, registration documents with the Cooperative Development Authority
- Lastly, for sole proprietorships, proof of registration with the Bureau of Trade Regulation and Consumer Protection, DTI
- 2 x 2 pictures with official signature at the back of directors and principal officers
- Audited financial statements for the past three years, if applicable
- Summary of importation for the past three years, if applicable
- Corporate and individual clearances from BIR (Bureau of Internal Revenue) and BOC (Bureau of Customs) where applicable; of directors and principal officers and proprietors/ partners
- BOI (Philippine Board of Investments) certificate of registration, if applicable
- Income Tax Returns of the company, partners, proprietor/owner for the past three years, as applicable
- Affidavit of Statement of Assets and Liabilities filed with the BIR
- List of articles regularly imported by the applicant
- Name of retained/ in-house broker, if applicable
- Other documents or information that may be required, which shall be covered by a supplemental CMO to be issued from time to time.
Here are the import customs procedures in the Philippines:
All imported articles invite import taxes, even those having been previously exported (except special mention envisaged in the Tariff and Customs Code or another regulation).
The entry form must be filled out at the Customs Office in the 30 days following the unloading of the last package. Failure to do so amounts to abandonment of the goods and IPSO facto confiscation of the cargo.
The importation of certain commodities is regulated or prohibited. Imports are classified as follows:
- Freely Importable Commodities;
- Regulated Commodities;
- Prohibited or Banned Commodities
Importation documents required for shipments to the Philippines include:
- Commercial invoice/Pro forma invoice;
- Bill of lading (for sea freight) or air waybill (for air freight);
- Certificate of origin (if requested);
- Packing list;
- Special certificates/import clearance/permit depending on the nature of goods being shipped and/or requested by the importer/bank;
- Commercial Invoice of Returned Philippine Goods
- Applicable special certificates/import clearance/permit depending on the nature of goods being shipped and/or requested by the importer/bank/letter of credit clause, e.g., Food and Drug Administration (FDA) license; and
- Commercial Invoice of Returned Philippine Goods and/or Supplemental Declaration on Valuation.
For a Letter of Credit (L/C) transaction, a duly accomplished L/C, including a Pro-forma Invoice and Import Entry Declaration for Advance Customs Import Duty (ACID) is required.
- A Pro-forma Invoice is required for non-L/C transactions (e.g., Draft Documents against Acceptance (D/A), Documents against Payment (D/P), Open Account (OA) or self-funded documentation).
Specific Import Procedures
There are products that require specific certificates. These products include:
These require a special certificate. The Tariff-Rate Quotas (TRQs) still remain on a number of sensitive products such as corn, poultry meat, pork, sugar, and coffee. Minimum Access Volumes (MAV) have been established for these commodities.
The following are the things you need to know about cosmetics registration in the Philippines:
1. The Cosmetic Company Must Appoint a Licensed Pharmacist
When applying for a license to operate as Cosmetic Importer/Distributor, your company will be required to appoint a pharmacist. That person then needs to sign papers ensuring the safety of the said products and in compliance to the company with Standard Operating Procedures (SOP). The SOP must describe the several steps followed by the company according to the FDA Requirements of Good Distribution Practice – World Health Organization.
The presence of the pharmacist is also required during the FDA inspection in the company’s premises; as well as his/her signature in the application form for the LTO. The appointment of a pharmacist is mandatory for as long as the LTO is active.
2. It is Important to Check if the Ingredients Composing your Cosmetic Product are not included in the list of Prohibited Substances issued by the FDA
The FDA of the Philippines has issued a list of ingredients that cannot compose the formula of any cosmetic materials when applying for a Certificate of Product Registration (CPR). The list is named “List of substances which must not form part of the composition of cosmetic products.” It contains 63 pages with substances completely prohibited – or allowed until a certain percentage.
Although these ingredients will not be evaluated during the LTO application, the list will be strictly taken into consideration by the time the applicant submit the package of application for the Certificate of Product Registration.
Despite the bureaucratic process imposed by the FDA and the long timeline to approve documents submitted by the applicants, the agency does not require applicants to conduct laboratory tests. In addition, it’s not rare to find in the market cosmetic products containing hazardous substances. The last recall ordered by the FDA was released last May 13th requesting the removal of 28 cosmetic products from the market after the FDA found toxic elements in their composition, such as lead and mercury.
3. Continuous Registration Process
If you are looking to register your cosmetic products in the near future, it’s better to start now. The process seems to be taking longer and longer. As of now, the timeline to register one single cosmetic product will not take less than 12 weeks, assuming your company was granted with the License to Operate as Cosmetic Importer/Distributor. However, due to recent changes in the FDA, including the reduction of internal staff, future applicants will need much more patience to finally see their products on the shelves of local stores.
When registering a new cosmetic product in the Philippines, it’s essential to receive accurate advice to avoid longer waits and additional costs. There are several clients who reported to not receive proper guidance during the application and received a denial letter from the FDA. This happened for almost a year without being communicated about missing documents. With the new process, it’s now safe to say that your application will be put in priority.
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