REVENUE MEMORANDUM CIRCULAR NO. 85-2019 issued on August 22, 2019 publishes the full text of Joint Circular No. 001-2019 of the Department of Finance (DOF), Bureau of Internal Revenue (BIR) and Bureau of Customs (BOC) entitled “Prescribing the Implementing Guidelines of the Fuel Marking Program pursuant to Republic Act (RA) No. 10963 (TRAIN Law)”.

Under the Joint Circular, the BIR and the BOC shall collect the Fuel Marking Fees at the same time as the internal revenue taxes on manufactured, refined or imported petroleum products are collected. The Fuel Marking Fees for locally refined or manufactured petroleum shall be collected by the BIR while the BOC shall collect the Fuel Marking Fees for imported petroleum products.

The Field Testing in refineries and its attached depots, gasoline stations and other retail outlets shall be supervised by the BIR. Field Testing in all other areas such as vessels, depots, warehouses, tank trucks or similar fuel-transporting vehicle shall be supervised by the BOC. When necessity or convenience requires, the BIR and BOC Officer may be authorized to conduct testing in areas other than that identified above. In all times, the appropriate protocol must be observed by the BIR and BOC, with the accompanying representatives of the Fuel Marking Provider (FMP), in its entry to the premises including the presentation of the Mission
Order and/or necessary identification.

When there is reasonable cause or verified information received that a vessel, tank trucks or similar fuel-transporting vehicle is carrying any unmarked, adulterated, or diluted petroleum products, the BOC or BIR Officer nearest the vicinity may stop and search the same. The BIR or BOC Officer nearest the vicinity of a fuel manufacturing or refining facility, gasoline stations and other retail outlets, depots, warehouses, buildings or place may enter and search the same where there is probable cause or verified information that adulterated or diluted fuel are produced or stored therein.

In all instance, the FMP must immediately conduct the testing of the petroleum product suspected to be unmarked, adulterated, or diluted. Proper documentation of the process must at all times be observed. BIR and BOC officials and personnel may effect the search and seizure ofthe petroleum products found to be unmarked, adulterated, or diluted. All members of the Field Inspection Units are deemed automatically deputized to perform necessary function to effect the
search, seizure and arrest related thereto.

The BIR shall ensure that all locally manufactured or refined gasoline, diesel and kerosene products are properly marked with the Official Fuel Marker before the same are removed from the place of manufacture or refinery into the owner’s tax-paid storage facilities/depots, for distribution into the domestic market.

The BOC shall ensure that all imported gasoline, diesel and kerosene brought into ports/sub ports of entry for petroleum are properly marked with the Official Fuel Marker before the same are released from Customs custody or is removed from tax-paid storage facilities/depots, for distribution into the domestic market.

The person, entity or taxpayer who owns or imports the product or to whom it is consigned, or whoever brings the same into the Philippines, or manufactures and/or refines the same shall cause and accommodate the marking thereof with the Official Fuel Marker.

Only petroleum products for domestic consumption with proof of payment of taxes will be subject of marking. Depending on the set-up of the designated marking location and the terminal infrastructure, the marker shall be introduced to the fuels in the following manner: a) manual dosing; or b) automated flow injection system. The FMP shall consider, in determining the correct marking doses for the petroleum products, the biofuel requirements under RA No.
9367, otherwise known as the “Biofuel Act of 2006.” Only authorized trained specialists by the FMP can mark the petroleum products. In no instance shall the marker be in the possession of any unauthorized person including depot and refinery personnel.

The marking process shall be undertaken in the presence of oil company/depot representatives, to witness and attest to the veracity of the marking process, together with BOC and/or BIR Officers, if warranted. In the case of refineries, the injection processes is deemed undertaken in the presence of the refinery operation technicians. The oil company/depot representative shall make the necessary request for marking at least two (2) calendar days prior to the manual marking. Notice shall likewise be made to BIR and/or BOC. In case of Automated Injection, the request for marking must be done at least eight (8) hours prior to the
operations requirement. Upon completion of the marking, a Certificate of Marking shall be issued, in duplicate, by the FMP to the oil company, depot representative or transporter, as applicable, and the BIR and/or BOC representatives witnessing the marking.

Notwithstanding the provisions of Sec. 157 of the NIRC of 1997, as amended, Marked Fuel products shall not be stored and commingled with Unmarked Fuel products. Pursuant to Sec. 155 of the NIRC, as amended, the manufacturer/importer shall adopt a suitable accounting or metering system with ability to accurately determine the volume of entered and withdrawn refined, manufactured or imported petroleum products.

Locally refined or manufactured and imported petroleum products, which have been fully marked with the Official Fuel Marker in accordance with the provisions of these Regulations, shall be deemed for domestic distribution, use or consumption within the Philippine territory. No marked fuel, in whole or in part shall be allowed to be removed or transferred for exportation.

Selected BIR and BOC Officer(s) shall be assigned as members of Field Inspection Teams who shall witness the sampling and actual testing of fuel samples by the FMP Technician and in the presence of the authorized representative of the owner of the fuel to be tested. The Field-testing plan will be drawn up daily and provided to authorized BIR and BOC Officer(s) and the FMP Technician(s). It shall contain the selection of sites (fuel retail stations) to visit, any intelligence report on the site and previous test results.

Testing shall be conducted by a composite team of the FMP Technician and/or a BIR or BOC Officer(s). For this purpose, a Mission Order shall be issued to the concerned BIR or BOC Officers authorizing the taking of sample to determine compliance with the required level of marking. The Mobile Fuel Analyzer shall be used to conduct the testing. No Field Test shall be conducted without the presence of an authorized BIR or the BOC Officer.

In the event that petroleum products do not contain the official marker of below the required level or marker are found in the domestic market or in the possession of anyone, or under any situation where said petroleum products are subjected to duties and taxes, it shall be presumed that the same were withdrawn or imported with the intention to evade the payment of the taxes and duties due thereon. The use of fraudulent marker on the petroleum products shall be considered prima facie evidence that the same have been withdrawn or imported without the payment of taxes and duties due thereon.

A confirmatory test shall immediately be undertaken by the Fuel Marking Provider in its testing laboratory on the petroleum product found to be unmarked, or containing diluted marker or marker below the acceptable percentage, or suspected to contain fraudulent marker. Confirmatory Fuel Test Certificates issued by the FMPs Laboratory Facilities shall be valid for any legal purpose from the date of issue and constitute admissible and conclusive evidence before any court.

In case petroleum product is found without the official marker or does not contain the required level of marker, the appropriate Excise Taxes shall be assessed and collected, inclusive of the appropriate 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 Excise Tax due thereon including penalty, the Field Inspection Team shall impound the non-compliant fuel on site in accordance with the procedures to be issued.

Upon effectivity of the Joint Circular and consistent with Section 155 of the NIRC, as amended, stocktaking shall be conducted on all tax paid gasoline, diesel and kerosene stored in all depots/terminals. Thereafter, no petroleum product intended form domestic market in whole or in part shall be imported or removed from their place of storage without payment of tax and marked pursuant to the Joint Circular.

Six (6) months after the roll-out of the Program, all petroleum products found in the domestic market including those stored in storage tanks, depots and terminal facilities shall be tested for compliance with the Fuel Marking Program.

The responsibilities of the Fuel Marking Provider, and other implementing guidelines of the Fuel Marking Program are specified in the Joint Circular.