Chamber of Customs Brokers, Inc. vs. Commissioner of Customs

The exclusive authority of a customs broker to sign import and export entry declarations under RA 9280 was impliedly repealed by RA 10863, which authorized the declarant (importer/exporter) or their agent/attorney-in-fact to lodge a goods declaration, as the two laws are irreconcilably inconsistent on this point. RA 10863's classification, which distinguishes between customs brokers and other declarants, is based on a reasonable foundation germane to the law's purpose of trade facilitation and compliance with international conventions, and thus does not violate the equal protection clause.

The dispute originated from the enactment of two statutes. RA 9280 (Customs Brokers Act of 2004) originally provided that import and export entry declarations "shall be signed only by customs broker." Subsequently, RA 10863 (Customs Modernization and Tariff Act) was enacted to modernize customs administration and fulfill the Philippines' obligations under the Revised Kyoto Convention. Its Section 106 allowed a "declarant"—which could be the consignee, a person with the right to dispose of the goods, or "a person duly empowered to act as agent or attorney-in-fact"—to lodge a goods declaration. Petitioner, a national organization of customs brokers, challenged RA 10863, arguing it unconstitutionally undermined the profession's exclusive functions.

• Nature of the Action: Petitioner Chamber of Customs Brokers, Inc. filed a petition for declaratory relief seeking a judicial declaration that Section 27 of RA 9280 (which mandates that import/export declarations be signed only by a customs broker) remains in full force, or, in the alternative, that Section 106(d) of RA 10863 (which allows an agent or attorney-in-fact of the declarant to lodge a goods declaration) be struck down as unconstitutional for violating the equal protection clause.
• The Legislative Background: RA 9280 was enacted in 2004 to professionalize customs brokers. In 2009, RA 9853 was passed, expressly amending Section 27 of RA 9280 to allow the exporter to personally sign the export declaration or delegate it to a customs broker. In 2016, RA 10863 was enacted to modernize customs administration and comply with the Revised Kyoto Convention. Its Section 106 defines a "declarant" broadly to include the consignee or "a person duly empowered to act as agent or attorney-in-fact."
• Petitioner's Core Grievance: Petitioner contended that RA 10863 did not expressly repeal RA 9280 and that the laws could be harmonized. It argued that allowing any agent or attorney-in-fact to sign goods declarations, a function previously exclusive to licensed customs brokers, created unfair competition and violated the equal protection clause by failing to provide a substantial distinction between licensed brokers and unlicensed agents.
• Respondent's Position: The Commissioner of Customs argued that Section 106 of RA 10863, in relation to its repealing clause (Section 1803), impliedly repealed the exclusivity in RA 9280. Respondent also asserted that RA 10863 fulfilled international trade obligations and that petitioner failed to prove a violation of the equal protection clause.
• Lower Court Findings: Both the RTC and CA found an irreconcilable inconsistency between the laws. The CA took judicial notice that RA 9853 had already amended RA 9280 by removing the exclusive signing authority for export declarations. It held that RA 10863 further and impliedly repealed the remaining exclusivity for import declarations. The courts also found no equal protection violation.

• Statutory Construction/Harmonization: Petitioner argued that RA 10863 did not expressly repeal RA 9280, and earnest efforts should have been made to reconcile and harmonize the two statutes.
• Equal Protection Clause: Petitioner maintained that Section 106(d) of RA 10863 unintentionally permits any person to practice the customs broker profession by allowing an unlicensed agent or attorney-in-fact to perform acts (signing goods declarations) previously limited to licensed brokers. This creates unfair competition and fails to provide a substantial distinction between the two classes, violating the equal protection clause.

• Implied Repeal: Respondent countered that Section 106 of RA 10863 impliedly repealed Section 27 of RA 9280 due to an irreconcilable inconsistency regarding the necessity of using a customs broker. RA 10863, as the later statute, prevails.
• International Obligation: Respondent argued that the discretionary use of a customs broker under RA 10863 reflects the Philippines' compliance with the Revised Kyoto Convention and the Trade Facilitation Agreement.
• Presumption of Constitutionality: Respondent asserted that RA 10863 is clothed with a strong presumption of constitutionality, and petitioner's speculative fears are insufficient to overturn it.

• Repeal of Statute: Whether Section 27 of RA 9280, granting customs brokers exclusive authority to sign goods declarations, was repealed by the subsequent enactment of RA 10863.
• Constitutionality: Whether Section 106(d) of RA 10863, by allowing a declarant's agent or attorney-in-fact to lodge a goods declaration, violates the equal protection clause of the Constitution.

• Repeal of Statute: Section 27 of RA 9280 was repealed. Even prior to RA 10863, RA 9853 had expressly amended RA 9280 by allowing exporters to sign export declarations themselves. Furthermore, RA 10863 impliedly repealed the remaining exclusivity for import declarations because its Section 106, which permits the declarant or their agent to lodge a declaration, is irreconcilably inconsistent with the "only by a customs broker" mandate of RA 9280. The later statute, intended to cover the whole subject matter and align with international standards, must prevail.
• Constitutionality: Section 106(d) of RA 10863 does not violate the equal protection clause. The law is economic legislation, and the rational basis test applies. The classification between customs brokers and other declarants (or their agents) is based on a substantial distinction—the law's purpose is to facilitate trade and modernize customs administration in line with international conventions. This classification is germane to that purpose and applies equally to all members of each class. Petitioner failed to present persuasive evidence to overcome the presumption of constitutionality.

• Implied Repeal by Irreconcilable Inconsistency — An implied repeal occurs when two statutes cover the same subject matter and are so clearly inconsistent that they cannot be reconciled, such that enforcing one necessarily nullifies the other. The Court applied this doctrine, finding that the "only by a customs broker" provision of RA 9280 and the "declarant or agent" provision of RA 10863 cannot stand together.
• Rational Basis Test for Equal Protection — For economic legislation not involving fundamental rights or suspect classes, a classification satisfies the equal protection clause if it is rationally related to a legitimate government interest. The Court used this test, finding that RA 10863's distinction between declarants and customs brokers was rationally related to the legitimate state interest of trade facilitation and compliance with international customs conventions.

• "The equal protection guaranty under the Constitution means that 'no person or class of persons shall be deprived of the same protection of laws which is enjoyed by other persons or other classes in the same place and in like circumstances.'" — Cited to define the scope of the equal protection guarantee.
• "The rational basis test requires only that there be a legitimate government interest and that there is a reasonable connection between it and the means employed to achieve it." — Articulates the standard applied to evaluate the economic legislation in question.

• Commissioner of Internal Revenue v. Semirara Mining Corporation, 811 Phil. 113 (2017) — Cited for the doctrine on the two categories of repeal by implication: (1) irreconcilable conflict, and (2) a later statute covering the whole subject of an earlier one as a substitute.
• Zomer Development Company Inc. v. Special Twentieth Division of the Court of Appeals, Cebu City, G.R. No. 194461, January 7, 2020 — Cited extensively for its discussion on the equal protection clause, clarifying that it does not prohibit legislative classification and requires only that classification be based on substantial distinctions germane to the purpose of the law.
• Samahan Ng Mga Progresibong Kabataan v. Quezon City, 815 Phil. 1067 (2017) — Cited for outlining the three tests of judicial scrutiny for equal protection challenges: strict scrutiny, intermediate scrutiny, and the rational basis test.

• Section 27, Republic Act No. 9280 (Customs Brokers Act of 2004) — Originally provided that "[i]mport and export entry declarations shall be signed only by customs broker." The Court held this was amended by RA 9853 and impliedly repealed by RA 10863.
• Section 106(d), Republic Act No. 10863 (Customs Modernization and Tariff Act) — Provides that a declarant may be "[a] person duly empowered to act as agent or attorney-in-fact for each holder." The Court upheld this provision as constitutional and as the operative law that repealed the exclusivity in RA 9280.
• Section 1803, Republic Act No. 10863 — The repealing clause stating that all laws inconsistent with RA 10863 are "hereby expressly repealed, amended or modified accordingly." The Court noted this as indicative of legislative intent to supersede prior inconsistent laws.
• Equal Protection Clause, 1987 Philippine Constitution — Invoked by petitioner; the Court found no violation under the rational basis test.

• Justice Alfredo Benjamin S. Caguioa (Ponente)
• Justice Marvic M.V.F. Leonen (Chairperson)
• Justice Amy C. Lazaro-Javier
• Justice Jhosep Y. Lopez
• Justice Mario V. Lopez

N/A — The decision was unanimous.