BOC Tightens Rules on Conflict of Interest

By : Atty. Allana Marie P. Nacino and Andre Harris I. Uy | 15 December 2025

On July 9, 2025, the Bureau of Customs (“BOC”) issued OCOM Memorandum No. 39-2025, reiterating and reinforcing long-standing conflict-of-interest rules applicable to all BOC officers, employees, and personnel. The Memorandum restates the prohibition against directly or indirectly engaging in, or maintaining any business or equity in entities involved in customs brokerage. It also introduced a new disclosure requirement covering familial relations within the fourth civil degree to individuals engaged in customs brokerage.

This Memorandum signals the BOC’s intent to sharpen ethical boundaries, reiterate long-standing limitations under civil service law, and impose new reporting requirements to ensure the integrity of customs operations.

Conflict-of-Interest Rules Under Existing Law

Restrictions highlighted in OCOM Memorandum No. 39-2025 trace their foundation to Section 3(i) of Republic Act No. 6713, which defines a Conflict of Interest as arising when a public official or employee holds a substantial interest in a private enterprise whose interests may be opposed to, or affected by, the faithful performance of official duties. The standard is intentionally broad, capturing not only situations of actual conflict but also those that give rise to perceived or potential conflicts, recognizing that public confidence is undermined not only by impropriety itself but by the appearance of it.

This statutory framework is reinforced by Section 12, Rule XVIII of the Revised Civil Service Rules, which generally prohibits government officials and employees from engaging in any private business or profession without prior written permission from the head of their department. For personnel whose positions require full-time devotion to government service, the prohibition becomes absolute. While passive investments are allowed, they must not create any real or apparent conflict, and government personnel are barred from participating in the management or decision-making of such enterprises.

Within the BOC, Customs Memorandum Order No. 25-2010 provides an additional layer of regulation tailored to the BOC’s sensitive operations. It prohibits customs personnel from entering into business or financial transactions with brokers, importers, exporters, or their representatives under circumstances that might reasonably be construed as influencing or compromising official duties. It also bars ownership, management, or employment, direct or indirect, in enterprises regulated or supervised by the BOC. Notably, this restriction continues to apply for one year after retirement, resignation, or separation from service. Where a conflict exists, the memorandum requires resignation from private posts within thirty (30) days and divestment of interests within sixty (60) days from assumption of public office.

Stricter Implementation under OCOM Memorandum No. 39-2025

OCOM Memorandum No. 39-2025 does not introduce an entirely new conflict-of-interest regime. Rather, it serves as a clear directive for stricter implementation of long-standing ethical rules, specifically in relation to customs brokerage. By expressly prohibiting any direct or indirect commercial, business, or equity involvement in customs brokerage entities, the Memorandum removes ambiguity and places personnel on definitive notice of prohibited interests.

A significant new element, however, is the Memorandum’s mandatory disclosure requirement. All BOC personnel were required to submit, within ten (10) days from issuance of said Memorandum, a verified affidavit disclosing any familial relation, by consanguinity or affinity within the fourth civil degree, to any individual who is directly or indirectly engaged in Customs Brokerage either as owner, incorporator, stockholder, partner, consultant, advisor, employee, or any other capacity. The obligation is retrospective. It applies to the Customs Brokerage where the BOC personnel has business interest or affiliation that has ceased operations in the last 5 years, as well as to interests that the BOC employee has already divested or assigned during the same period. It also applies to any Customs Brokerage that has declared and registered the BOC personnel as incorporator even if the equity interest has already been divested. This expanded disclosure mandate reflects an intent to uncover and monitor relationships that may not be immediately visible but could still pose actual or perceived conflicts.

Toward Greater Transparency or Merely a Restatement?

This Memorandum was issued to promote, observe, and ensure good governance in the BOC, consistent with the spirit and intention of Section 13, Article VI of the Constitution which repudiates Conflict of Interest in the government service.

This likewise aligns with Commissioner Ariel F. Nepomuceno’s reinforcement of the BOC’s “No Take” policy, which strictly prohibits bribery and unlawful monetary transactions, as part of the BOC’s anti-corruption efforts.[1]

While OCOM Memorandum No. 39-2025 consolidates long-standing ethical norms and supplements them with a new disclosure mechanism, it bears noting that the bulk of its prohibitions already existed under RA 6713, the Civil Service Rules, and CMO 25-2010. The Memorandum did not expand these prohibitions—it merely reiterated them. The only truly new operational feature is the requirement for BOC personnel to file a verified disclosure of familial relations within a strict ten-day period from issuance of the Memorandum.

This raises the broader question: if the rules themselves remain unchanged, did this issuance achieve what earlier issuances could not? The answer depends less on the Memorandum’s text and more on the quality of its implementation.

The Memo does not establish new enforcement mechanisms, audit protocols, or monitoring structures. It simply states that violations “shall be dealt with in accordance with law.” Without making such directive a continuing requirement, systematic verifications, periodic audits, or consistent sanctions for nondisclosure, the declaration made may risk devolving into another one-time compliance exercise, procedurally observed but substantively ineffective.

Customs brokerage remains a high-risk sector where influence and regulatory discretion intersect. If the BOC matches this issuance with rigorous follow-through, routine audits, verification of disclosures, and meaningful accountability, the Memorandum may mark a step toward greater transparency. But if compliance is treated purely as a filing requirement, without deeper institutional commitment, it may ultimately amount to a restatement of norms that, while sound, have historically proven difficult to enforce.

In light of the recent issues involving alleged misuse of public funds and the long-standing controversies surrounding customs operations across the Philippines, there is a bit hope that, if implemented in good faith and enforced strictly, this new disclosure requirement may begin to restore public trust in the BOC.

The challenge, therefore, is not the clarity of the rule but the consistency of the enforcement. Whether OCOM Memorandum No. 39-2025 becomes a catalyst for reform, or merely another restatement, will depend on what the Bureau chooses to do next.

[1] BOC Chief Enforces “No Take” Policy and Calls for Stakeholder Cooperation, Bureau of Customs, July 29, 2025, available at https://customs.gov.ph/boc-chief-enforces-no-take-policy-and-calls-for-stakeholder-cooperation/ (last accessed December 7, 2025).

Disclaimer: The views and opinions expressed in this article are those of the authors and do not necessarily reflect the views and opinions of the Firm or any of its partners. This article shall not be construed as official legal advice from the Firm. 

Atty. Allana Marie Nacino is a lawyer who obtained her Bachelor of Public Administration degree from University of the Philippines, Diliman (cum laude), and her Juris Doctor Degree from the Arellano University School of Law.

Andre Harris I. Uy is a paralegal who earned his Bachelor of Science degree in Legal Management from De La Salle University. He is presently completing his Juris Doctor Degree at the San Beda University.

For further inquiries, please contact counsel@dargonlawfirm.com or call (02) 8426-1837.