REVENUE MEMORANDUM CIRCULAR NO. 21-2021 issued on February 16, 2021 circularizes Joint Circular No. 001-2021 issued by the Department of Finance (DOF), Bureau of Internal Revenue (BIR) and Bureau of Customs (BOC), which prescribes the implementing guidelines for Field Testing activities under the Fuel Marking Program pursuant to Republic Act (RA) No. 10963 (Tax Reform for Acceleration and Inclusion [TRAIN] Law).

   The Field Inspection Unit (FIU) shall serve as the joint special task force established by the BOC and BIR to perform the Field Testing activities. The same shall be created in coordination with other government agencies on matters concerning petroleum products. Paragraph 1 of Section 3.2. of DOF-BIR-BOC JC No.1-2019 is accordingly deleted.

    Pursuant to Sections 15 and 171 of the NIRC and Section 214 of the CMTA, the FIU are deputized to perform necessary function to effect search, seizure and arrest related thereto. For this purpose, BOC and BIR shall each provide a list of FIU Officers to be included in the Deputization Order to be issued by each agency pursuant to its existing rules and regulations.

    The responsibilities of the parties (Fuel Marking Service Provider, owner and his representative and the FIU) in the Field Testing process are specified in the Joint Circular. The following shall be observed in the conduct of Field Testing:

      a. A Field Testing Plan Identifying the area for testing and the designated Mobile Laboratory Unit shall be transmitted to FIU no later than 8:00AM of the day of the Field Testing.
       b. Mission Order shall be issued to the FIU authorizing the conduct of Field Testing in locations identified in the Field Testing Plan.
     c. Field Testing shall be conducted in locations where fuel was transported, sold or stored, regardless if the facility is open to the public or for use of a limited group or person.
        d. At all times, the appropriate protocol shall be observed by the FIU and Service Provider when conducting Field Testing activities.
        e. The owner or his representative shall be required to fill-out the Field Testing Information Form and provide the documents (listed in the Joint Circular) to the FIU at applicable testing locations.
        f. The Service Provider, witnessed by the Owner or his Representative and the FIU, shall collect 500 ml samples each of gasoline, kerosene and/or diesel from the following, as applicable:

             i. All UGTs or storage tanks for locations with a single or multiple-product source UGTs;
            ii. All pumps for locations with single-product source UGTs only after fueling a vehicle; or
            iii. All compartments of Tank Trucks, Vessels or Barges
               The samples shall be properly identified and documented for purposes of testing in the Mobile Laboratory Unit for testing.                                                                                                                                    The procedures to be observed during fuel testing process and confirmatory test are specified in Sections 5.7 and 6 of the Joint Circular, respectively

     Petroleum products found without the Official Fuel Marker or does not contain the required level of Official Fuel Marker shall be subject to duties and taxes, inclusive of the appropriate fines and penalties, without prejudice to the confiscation and forfeiture of such Unmarked or Diluted Fuel and the filing of the appropriate criminal case.

       Pending assessment and payment of the duties and taxes due thereon, including penalty, the FIU shall impound the non-compliant fuel on site in accordance with the procedures prescribed under Section 7 of the Joint Circular.

        In case the petroleum product is determined to be Unmarked, Diluted or Adulterated, either of the corrective measures specified under Section 8 of the Joint

         Circular may be done after payment of applicable taxes, fines, penalties and Fuel Marking Fees without prejudice to Section 265-A of the NIRC, as amended. All costs, equipment and logistics relative to the corrective measures, including removal, replacement, and marking of fuel, shall be borne by/of the Owner.

       To ensure that fuels are properly marked, the Service Provider shall conduct sampling and testing of the Marked Fuel from the refinery, terminal, depot, vessel, tank truck or other similar fuel storage facility. The cost of the Product Testing shall be borne by the Fuel Owner

           Upon the conduct of the sampling and testing, a Certificate of Product Testing shall be issued in duplicate to the Fuel Owner or his representative. A copy of the Certificate of Testing will be transmitted to the BIR or BOC.

             In case the Product Testing shall yield results indicating that the marker content is below the tolerance level, necessary validation shall be done to ensure that the declared fuel volume for marking and the marking applied is correct. Upon determination of absence of irregularities in the declared volume of fuel for marking or other possible irregularities, which may contribute to the undermarking process, the Service Provider shall conduct necessary measures to correct the marking level.

              All offenses relating to the Fuel Marking Program shall, in addition to the penalties imposed under Title X of the National Internal Revenue Code (NIRC), as amended, Section 1401 of the CMTA and other relevant laws, be punishable under Section 265-A of the NIRC, as amended. Seized or impounded Unmarked, Diluted and Adulterated Fuel shall be disposed of in accordance with existing laws, rules and regulations of BOC or BIR.

             The Service Provider shall provide monthly reports, or as frequent as necessary, detailing the activities undertaken during the Field Testing. These reports shall be submitted electronically to DOF, BIR and BOC, while hard copies thereof shall be made available if required. A dashboard shall be made available and maintained by the BOC and BIR to indicate the municipality, no. of location tested, no. of location with pass results and no. of location with failed result.

             Within reasonable time from the start of the Fuel Marking Program, Field Testing shall be done to determine the market saturation level. The Service Provider shall identify the location to be covered by the Transitory Field Testing, which should include storage tanks, depots and terminal facilities. During the community quarantine brought about by the COVID-9 pandemic, the Omnibus Guidelines on the Implementation of Community Quarantine in the Philippines, as prescribed by the Inter-Agency Task Force for the Management of Emerging Infectious Diseases (IATF-EID) shall, at all times be observed. In this regard, the implementing agencies as well as the Service Provider shall ensure that the personnel dispatched for every Field Testing complies with IATF Protocols.