PORTS MICP 12 October POM 12 October 09

@ PORTS MICP- 12 October POM – 12 October ‘ 09 Bo. C CMO 27 -2009: Implementing E 2 M IAS and PEZA e. IPS Francis Norman Lopez President

Agenda • Introduction • BOC e 2 m Import Assessment System, CM 0 27 -2009: IAS Rollout to All Ports – CPRS: Client Profile Registration System as applicable to PEZA locators – NSW: National Single Window and the PEZA e. IPS – e. Manifest – e 2 m Import Workflows: Formal, Warehouse, Transshipment, Informal – PASS 5: e. Payment of duties, taxes, fees – OLRS: BOC Release Instruction to warehouse and port operators – SSDT: Statement of Settlement of Duties and Taxes • Q&A

Inter. Commerce e. Customs Services • From Value Added Network (VAN) to Value Added Service Provider (VASP) – Customs EDI VAN from July 1998 –June 2007 – First Customs VASP in July 2007 – PEZA Ecozones, Clark Freeport, Subic Freeport, Board of Investments • e. Customs Services – Lodgment of Import Entry Declaration: Consumption/ Formal, Super Green Lane, Warehouse, Transshipment – e. Manifest submission by forwarders – e. Payment of Customs Duties and Taxes – Online Cargo Release – Export Declaration – Alert Messages to importers via SMS/Text and Email 1 st Customs EDI VAN (1998) PEZA VASP (2006), CDC VASP (2006), BOC VASP (July 2007) BOI VASP (Jan 2009)

About Inter. Commerce • IT, Value Added Network Services company – with more than 22 years experience in B 2 B transactions, and – more than 10 years in e. Customs Services – accredited as EDI VAN in 1998 and now accredited by Customs, PEZA, Clark and Subic Freeport and BOI as Value Added Service Provider (VASP) • A distributor of Global Exchange Services – GXS, the largest global B 2 B e. Commerce services provider • Member, Pan Asian e. Commerce Alliance (PAA) • Independent IT Company - No Affiliation with any logistics company (broker, forwarder, warehouse operator), thus no potential conflict of interest with client logistics providers, and ensuring data confidentiality and integrity • Inter. Commerce. . . YOUR Value Added Service Partner PEZA Department of Agricultur BAI BPI BFAR Local Focus – Global Reach !

Pan Asian e. Commerce Alliance - PAA Korea China Japan Hongkong Macau Chinese Taipei Philippines Thailand Indonesia Malaysia Singapore Australia . . . PAA Members accredited by respective Customs Administration, provides the network infrastructure and legal framework for a secure and reliable information exchange

CMO 27 -2009 – e 2 m IAS Implementation • Implementation of e 2 m Customs System -P 3 IAS in all Customs Port Offices – nationwide before end Dec 2009 • Scope – – – – Client Profile Registration System (CPRS) e. Manifest System Formal Entry System (FES) Warehouse Entry System (WES) Payment Abstract Secure System v 5. 0 (PASS 5) Other Settlement Modes (OSM) Online Cargo Release (OLRS) Transshipment and Informal Entries still under ACOS procedures.

IAS Customs Clearance Workflow NWS BIR: ATRIG, DOF: TEC PEZA e. IPS NSW - Manifest Shipping Lines, Forwarder/Consolidators • Selectivity VASP Importers Brokers -SGL -Green -Yellow -Red • Assessment CY/CFS Operators BAP/PCHC Authorized Agent Banks - AAB • Validation - CPRS • PASS 5 • OLRS

Client Profile Registration System • Mandatory for Customs brokers, Importers, other Customs stakeholders – including PEZA Accredited Locators • Importer needs the CCN of Broker and VASP* in its CPRS • Banks need copy of COR/CCN for the issuance of the Bank Reference Number_ BRN *Inter. Commerce CCN (VASP): VA 0000000116

CPRS Data Elements § Basic Company Profile - Registered Name (with SEC, BIR, PEZA) TIN Address § Board of Directors: Top 5 Board of Directors ie Chairman, President, Corporate Secretary, Treasurer, etc. § Principal Officers : Top 5 Operating Officers ie President, Executive Vice-President, Sr. Vice-President, etc § Responsible Officers : Officers that interacts/interface with BOC, eg Purchasing, Imp. Ex or Logistics Manager § Nominated Customs broker with CCN § Nominated VASP with CCN

Inter. Commerce CPRS Web. Application 1. Importer registers with Inter. Commerce online (www. intercommerce. com. ph), providing user name, password 2. Submit accomplished Information Services Agreement 3. Inter. Commerce activated user name 4. Importer inputs all required information including digital pictures and scanned signatures 5. Importer clicks on “Submit” for transmission to BOC - and receives either a “Sent” or “Error” message 6. BOC sends email Alert Notification - ie. Stores, Approved or Disapproved, Activated

Client Profile Registration System • Steps in CPRS – email Alert Notification – Stored – Complete – Approved or Disapproved • If Approved, the COR/CCN is attached as pdf file • If Disapproved, CPRS automatically deleted – Activated – Amended – Expired • Registration of Certificate of Registration/CCN with the Authorized Agent Banks (AABs) – AAB issuance of the Bank Reference Number _ BRN

CPRS ‘Errors’ • "Disapproved" due to the following reasons: – Different business address as per CAS record. – Suspended or expired accreditation, or not yet Accredited as per CAS record – Incomplete or different business name, as per BIR or SEC Registration – Wrong TIN, invalid TIN, different TIN or no TIN per BIR Record – No picture of responsible officer, or unacceptable picture (size, quality) – Different name (broker) in PRC Record • COR/CCN not attached in “Approved” email Alert • No “Activated” email alert • Expired CAS Accreditation Locators automatically approved if endorsed by PEZA to BOC

PEZA ‘Accreditation’ and BOC Registration • All PEZA Registered Enterprises are deemed “Accredited” • PEZA Registered Enterprises are exempted from the annual BOC Accreditation – CASRIM • With compliance to the BOC CPRS ie “Registration”, the PEZA locator provides information about the company and updates the e 2 m IAS database • BOC will issue the Customs Client Number – CCN only upon compliance to the CPRS requirements • PEZA Locator needs the CCN to be able to get a Bank Reference Number – BRN from its authorized bank Locator’s CPRS/CCN needed in Entry Declaration validation and payment of BOC fees (IPF, Doc Stamps, CSF, etc. )

Pre-Lodgement e 2 m IAS Requisites Importers CPRS Brokers CCN Warehouse Operators Airlines, Shipping Lines e. Manifest NSW/LCS Bank AABs Accreditation as BOC AAB, PAS 5 Compliant PCHC/ BAP

BOC NSW and PEZA e. IPS • Bo. C requires agencies to transmit import permit/clearance data electronically – to be used for the automatic validation of required permits as part of the processing of the import declaration • PEZA e. IPS data to be transmitted to BOC upon its approval – e. IPS now applicable to all imports, including “regulated” or controlled products and machineries and capital equipment PEZA compliance to NSW will be mandatory upon implementation of e 2 m IAS Transshipment Entry

PEZA e. IPS and Transshipment Entry e. IPS Lodgement (1) Locator Broker Approved e. IPS Online e. IPS, Entry Preparation e. IPS, SAD PEZA transmission of e. IPS data to BOC Transshipment Entry SAD Lodgement (2) Dec Code 8 -8 Online Printing of e. IPS, SAD Approved Entry SAD+ Assessment Notice Bu of Customs Submission ot e. IPS SAD to CPCO/BOC Inter. Commerce provides Locators online visibility on PEZA, Customs transaction, and download management reports

Nominating Inter. Commerce as VASP • Submit nomination letter to PEZA Zone Administrator/Manager – Designate Inter. Commerce as VASP – Authorize the uploading of the same list on importables in the Inter. Commerce e. IPS database • Online registration and designating authorized brokers • Set up of advanced deposit (if applicable) September 25, 2009 Subject: Nomination of VASP for e. IPS Dear Zone Administrator/Manager We are pleased to nominate Inter. Commerce Network Services, Inc. as our value-added service provider (VASP) for the electronic Import Permits. The list of importables to be used/for uploading will be the same as those earlier submitted and approved. Any additional importable shall be submitted online. Very truly yours, President/CEO/GM

e. Manifest Workflow Arrival Schedule BOC e 2 m IAS Manifest Processes Shipping / Air Lines Validates Manifest (IFM, Master) MBL Exist Registers Manifest Consol Manifest (GEN, BOL, CTN) Consolidators/ Forwarders Manifest to be submitted 12 hours prior to vessel arrival

Import Entry Workflows – e 2 m IAS BIR Do. Finance PEZA Airline/ Shipping Line Forwarder/ Consolidator ATRIG, Tax Exemption Certificate (TEC) National Single Window Gateway e. IPS Manifest/BL (BOL, GEN CTN) IED, Import Entry SAD Internet BOC Response: Assessment Final/Temporary Broker Invoice, BL/AWB Importers’ Online Visibility: Import Entry, Assessment Statement of Settlement Of Duties and Taxes Importer Certificate of Registration/CCN ? BRN + Auto Debit Agreement (ADA) Debit from Importer Account VASP Gateway Release Instruction Arrastre, Whse, CY-CFS BOC Final Payment Instruction (Net: duties, taxes, fees) AAB Final Payment Confirmation AAB BAP/PASS 5 e 2 m IAS

Major Changes - Lodgment • Import Entry Declaration - IED – Electronic lodgment thru VASP, prior to opening of Letter of Credit – PASS 5/auto debit payment of Advanced Duties to be settled within 7 days • Import Entry – Consumption, Warehouse – Use of C-SAD Form ie Inter. Commerce’ Web. CWS • No more encoding of IEIRD serial number in Box 28; Use importer’s bank reference number - BRN – PASS 5/auto debit payment of Customs duties and taxes, based on Final Assessment • No more over the counter, advanced payment thru banks; No O/R • No check writing and PAS 4 file name • No additional payment at the Port of Discharge – Automated matching of payment vs Final Assessment, automatically triggering the Release Instruction to arrastre, warehouse or CY/CFS – Automated issuance of Statement of Settlement of Duties and Taxes, upon receipt of AAB confirmation

Major Changes – Customs Processing • Validation of SAD – – CPRS registration of importer and broker - CCN Use of valid Bank Reference Number - BRN e. Manifest data - eg multiple containers, details National Single Window - NSW • BIR Authority To Release Imported Goods (ATRIG) • DOF Tax Exemption Certificate • PEZA e. IPS ? ? • Selectivity – no changes • Assessment – Automated response to entries within 10 -20 minutes • Final Assessment Notice for SGL and Green Lane • Temporary Assessment Notice for Yellow and Red Lane

Major Changes – Payment of CDT • Bank Reference Number – AAB to issue BRN to importer upon presenting the COR/CCN and nominating account for autodebit arrangement – AAB to transmit importer BRN to BOC • Payment of duties, taxes and fees via PASS 5 – Autodebit payment of advanced duties prior to opening of L/C based on Final Payment Instruction from BOC to AAB – Autodebit payment of duties, taxes and fees based on final Assessment and Final Payment Instruction from BOC to AAB • Net of advanced duties, TDM – Use of C-SAD Form eg. online printout from Inter. Commerce’ Web. CWS • No more encoding of IEIRD serial number; Use importer’s bank reference number – PASS 5/auto debit payment of Customs duties and taxes, based on Final Assessment • No more over the counter, advanced payment thru banks; No O/R • No check writing and PAS 4 file name • No additional payment at the Port of Discharge

SSDT • BOC system generated Statement of Settlement of Duties and Taxes which serves as proof of payment on duties, taxes and fees – – – – • • CUD: Customs Duties VAT: 12% Value Added Tax FIN: BOC fines, penalty, other charges IPF: Import Processing Fee CSF: Container Security Fee CTF: Cargo Transfer Fee TCC: Tax Credit Certificate Bank may issue official receipt on the total amount paid for CDT and fees. BOC to officially advise BIR on the issuance of said SSDT; BIR to verify details from BOC e 2 m system

BOC e 2 m IAS Benefits • Cost Savings : clerical, transport and other expenses – Broker preparation and Customs processing of documents – Processing of payment - MC, PAS 4 encoding and transmission, “forcedmatching by BOC Cashier – Electronic lodgment with response within 30 minutes – Demurrage, Storage charges • Reduced Cycle Time – from 3 days to 30 minutes – – – • Electronic lodgment Automated approval process Autodebit of payment for duties and taxes Automated matching of payment vs assessment Automated Release Instruction Transparency of Processes – Importers Online Visibility via Inter. Commerce website: Declaration, Assessment, SSDT and Management Reports

BOC e 2 m IAS Implementing CMOs • • CMO 39– 2008 CPRS Database Build-up CMO 6 -2009 Procedures for the payment of Advance Duty Deposit and Final Payables CMO 27 -2009 Procedure for the implementation of e 2 m IAS in all Ports CMO 30 -2009 Procedures for the accreditation of CBW and CY/CFS CMO 38 -2009 Supplemental Guidelines (Assessment) to CMO 27 -2009 CMO 37 -2009 Submission of electronic manifest through VASP’s CMO 40 -2009 Manual Discharge of Informal and Transshipment BL’s

Additional Policies and Procedures • Advance payments of CDT prior to ‘date of e 2 m IAS implementation’ at Port • First and last importer, importation • Tentative release • Short shipment • Post Entry Amendments, Modifications • Additional payment of CDT resulting from Post Entry • SSDT as an official document as importer’s proof of payment of duties, taxes and fees (in lieu of O/R)

e 2 m IAS Implementation Schedule • • • Port of Batangas Ports of Limay, Mariveles* Manila International Container Port of Manila Ports of Subic, Clark Ports of Cebu, Mactan Port of NAIA Port of Davao Port of Cagayan de Oro Other Ports : 21 March 2009 : 10 Aug : 12 Oct (17 Aug) : 12 Oct (01 Sept) : TBA : TBA * Port of Mariveles “LIVE” as of 03 August 2009, import entry lodged by broker for Total Philippines thru Inter. Commerce

E 2 M IAS @ MICP, POM DOI moved to 12 October 2009 Key Areas needing Resolution • Importer CPRS/CCN and BRN – – • e. Manifest – – • • • Updated tariff tables eg JPEPA rates Final Assessment Notice for R/Y Lanes Release instruction to arrastre, CY-CFS – Data accuracy PASS 5 Final Payment Instruction – • 3 -5 days prior to entry lodgment IED and Advanced Duty Payment – Input previous payments to e 2 m E 2 m IAS Process – – • Manifest data on ACOS and e 2 m IAS Timing on e-manifest lodgment by forwarders NSW: BIR ATRIG, DOF TEC – • Only 5, 000+ importers ? PEZA, CDC, SBMA registered enterprises Breakdown: Duties, VAT, Others ? Statement of Settlement of Duties, Taxes, Fees – Acceptable to BIR as proof of VAT payments

Q&A Unit 2203, 88 Corporate Center Sedeno St. , Salcedo Village Makati City 1227 Telephone: +02 843 2792 Fax: +02 843 8160 Email: marketing@intercommerce. com. ph www. intercommerce. com. ph