27/12/2025
PORTFOLIO
27 December 2025
LETTER OF AUTHORITY (LOA) IN CUSTOMS ENFORCEMENT--ITS ORIGINS AND SOME PITFALLS
ONE OF THE most formidable—and often dreaded—enforcement mechanisms employed by the Bureau of Customs (BOC) is the Letter of Authority (LOA).
In practice, an LOA is perceived as a command emanating from the highest official of the agency, issued by the Commissioner of Customs whenever the Bureau seeks to exercise what it characterizes as its visitorial power under Section 224, Chapter 3, Title II of the Customs Modernization and Tariff Act (CMTA).
This raises fundamental questions: What exactly is a Letter of Authority in the customs context, and when did it first emerge as an enforcement instrument of the BOC?
The authority for the Customs LOA is traced to Section 4.6.1 of Customs Administrative Order (CAO) No. 03-2019, approved on 08 April 2019.
CAO No. 03-2019 is an administrative issuance promulgated by the Commissioner of Customs and approved by the Secretary of Finance. As such, the LOA is, in legal contemplation, an administrative creation. It cannot rise above, nor expand beyond, or run roughshod over the statute it purports to implement—the CMTA, let alone the Constitution.
Notwithstanding this limitation, the prevailing institutional view within the BOC appears to be that the issuance and use of an LOA need not be anchored on any express legislative authorization.
Under CAO No. 03-2019, a Letter of Authority is defined as “a written authorization signed by the Commissioner of Customs in the exercise of the power to visit and inspect premises and goods, identifying the Customs Officers authorized to demand evidence of payment of duties and taxes on imported goods openly offered for sale or kept in storage,” citing as its basis Section 224, Chapter 3, Title II of the CMTA.
As a matter of historical record, the LOA first surfaced as an enforcement tool following what was then considered the largest raid conducted by the BOC in the Binondo area. In that operation, more than two hundred (200) commercial stalls were ordered padlocked for failure to present proofs of payment of duties and taxes on merchandise openly displayed for sale.
At the time of the Binondo raids, there was no existing Customs rule prescribing the form of an LOA, no guidelines governing its issuance, and no standards regulating its use or enforcement. The relevant CAO was promulgated only after those raids had already been carried out.
Significantly, these events transpired under the regime of the Tariff and Customs Code of the Philippines (TCCP), the predecessor statute of the CMTA. Section 224 of the CMTA was reportedly derived from Section 2536 of the TCCP. Yet, the TCCP itself made no reference whatsoever to a Letter of Authority. This historical context marks the provenance of the first LOAs issued by the Bureau of Customs.
Equally noteworthy is the fact that during the congressional deliberations on the CMTA, the concept, scope, or use of an LOA was not the subject of legislative discussion. Consequently, the LOA was never codified in the CMTA, unlike the Letter of Authority of the Bureau of Internal Revenue (BIR), which is expressly provided for under the National Internal Revenue Code.
Despite its non-codification, the Customs LOA has, over time, been utilized as an instrument in the pursuit of alleged tax fraud.
At present, the use of the LOA in customs enforcement is governed solely by CAO No. 03-2019. Its relative ease of issuance and broad applicability have rendered it the enforcement tool of choice for customs officials tasked with running after alleged tax evaders.
Currently, LOAs have been employed to pursue consignees of imported goods even after such goods have already been cleared and released by port authorities. The LOA has also become so pervasive that other regulatory agencies—and even media organizations—have, on occasion, sought the assistance or participation of the BOC in enforcement activities primarily on the strength of the latter’s ability to issue an LOA.
As earlier discussed, however, the Customs LOA remains devoid of any explicit legislative mooring. Only Section 224 of the CMTA is frequently invoked as its legal basis, yet a close reading of that provision reveals no express reference to a Letter of Authority as an enforcement mechanism. What Section 224 confers is the power of the Commissioner of Customs to visit and inspect premises and, when necessary, to demand evidence of payment of duties and taxes on imported goods openly offered for sale or kept in storage—powers that, by the statute’s own terms, may be exercised even without the creation or issuance of an LOA. Nowhere in the text of Section 224 is the Letter of Authority mentioned.
And in light of the Wenle Guidelines promulgated by the Supreme Court in G.R. No. 242957 on February 28, 2023, the BOC needs to revise, adjust, update, or modify its rules and procedures on the issuance and ex*****on of its Letter of Authority.
The most notable in these Wenle Guidelines is: The LOA, as a form of administrative warrant, "must not pertain to a criminal offense, or be pursued as a precursor for the filing of criminal charges." And "any object seized pursuant to such writ [LOA} is inadmissible in any criminal proceedings."
The Wenle Guidelines seem stringent, but that is how the Supreme Court crafted the framework aimed at eliminating abuses in the implementation of all administrative warrants--including the LOA, occurrences prevalent not only in the BIR but in BOC as well. Yes, the Customs LOA cannot be used for filing criminal offenses. Deviation from the Wenle Guidelines will expose the responsible officers and agents to what the High Court denominated as “a prima facie proof of usurpation of judicial function, malfeasance, misfeasance, nonfeasance, or graft and corrupt practices” punishable by the laws for being repugnant to the Constitution.
The new leadership of the Bureau of Internal Revenue (BIR) had immediately acted on the complaints; Commissioner Charlito Mendoza "grabbed the bull by its horns"--he suspended issuances of BIR LOAs, including the implementation of those about to be served.
That was the first official issuance of Commissioner Mendoza--quick, resolute, determined. Unfortunately, we didn't see a similar response from its port-based counterpart--the BOC.
