RR No. 14-2024: Rules and regulations governing the modes of disposition of seized/forfeited articles in line with Section 130, 131 and 225 of the National Internal Revenue Code of 1997, as amended

Key points

1. Code basis. Section 131 requires the owner or importer to pay excise taxes on imported articles to Customs Officers before release. Confiscated articles are destroyed by the most environmentally friendly method under rules of the Secretary of Finance. Section 225 requires sales of forfeited chattels and removable fixtures to follow, so far as practicable, the notice, time and manner of sale for distrained personal property.
2. Destruction or sale after forfeiture. Distilled spirits, liquors, cigars, cigarettes, other tobacco products and apparatus for illicit production may be destroyed on the Commissioner’s order when sale would harm public health or law enforcement. Other excisable articles made or removed in violation of the Code, and imitation stamp dies and labels, may be sold or destroyed at the Commissioner’s discretion. Forfeited property is not destroyed until at least twenty (20) days after seizure.
3. Public auction and private sale. Public auction is competitive bidding among multiple buyers at or above a set minimum bid or floor price. Negotiated or private sale applies to articles unsold after two (2) failed public auctions and unsuitable for official use or donation, with prior approval of the Secretary of Finance. For personal properties, the two failed biddings and the approval can be dispensed with.
4. Official use and donation. Articles unsold after at least two (2) public auctions and suitable for official use may be declared for BIR official use by the CIR, with the Secretary of Finance’s approval. Donation to another government agency applies to unsold articles not suitable for BIR use, after approval of the Secretary of Finance on the CIR’s recommendation.
5. Destruction and later order. Destruction covers any process that renders articles unusable, on the order of the CIR or his authorized representative, if the articles are injurious to public health or prejudicial to law enforcement. A separate Revenue Memorandum Order will set the detailed procedures.

Who is affected

• Owners of seized or forfeited excisable articles
• Importers

Deadlines and effectivity

• No destruction of forfeited property until at least twenty (20) days after seizure