Category: Trade Policy & Procedures Simplification

Exporters and manufacturers are urged by the Strategic Trade Management Office (STMO) to conduct risk assessment of their products that may be of dual-use goods, otherwise known as strategic goods.

Dual-use goods are items, software, or technology which can be used for both civil and military end-use. These goods are listed in the National Strategic Goods List (NSGL). Other types of strategic goods are military goods and nationally controlled goods.

Strategic goods is defined by the Strategic Trade Management Act (STMA) as “products that for security reasons or due to international agreements, are considered to be of such military importance that their export is either prohibited altogether or subject to specific conditions”. These products are “generally suitable to be used for military purposes or for the production of WMD (Weapons of Mass Destruction)”.

To determine if the goods are of dual-use, exporters may refer to the NSGL, ask the product manufacturer or request classification from the STMO.

Exporters of dual-use goods are required to register and secure an exporter authorization or license from the STMO. Registration of exporters, as announced by the STMO in a forum, will be in the last quarter of 2019, while the exporter authorization is scheduled to be implemented in the third quarter of 2020.

The STMO, a bureau under the Department of Trade and Industry, is mandated by the STMA to regulate such goods by issuing “authorization/ licenses for the export, import, re-export, transit, transshipment, and provision of related services such as brokering, transporting, financing and providing technical assistance of strategic goods”.

Also covered by the STMA are the transit, transshipment, re-export, import, and reassignment of strategic goods. The schedule of regulating such activities is still to be announced by the STMO.

Non-compliance of the Act by the exporters will risk them seizure, delays, fines, imprisonment and inclusion in the denials list/ watchlist.

The STMA, otherwise known as Republic Act No. 10697, “An Act Preventing the Proliferation of Weapons of Mass Destruction by Managing the Trade in Strategic Goods, the Provision of Related Services, and for Other Purposes,” was enacted to enforce measures to establish domestic controls to prevent the proliferation of weapons of mass destruction (WMD) and their means of delivery from or within the Philippines. (ARB)

Effective this year, exporters of products under the European Union (EU) Generalized System of Preference (GSP) – are required to be registered to the Registered Exporters System (REX).

The system allows exporters to issue self-certifications of the origin of goods  to the EU under the GSP Program.

The REX replaces the current system of origin certification based on certificates of origin issued by the Bureau of Customs (BOC).

However, the rules of determining the origin of good in the EU GSP scheme remain unchanged with the application of the REX System.

The global transition period from the current system of origin certification to the REX system started on 01 January 2017 and will last until 30 June 2020.

There are three (3) easy steps for exporters to register in the REX system: (1) The exporter fills in (electronically/ on paper) an application and submits it to the BOC; (2) If the application is complete, BOC encodes it in the REX system, assign a REX number, a registration date and a validity date; and (3) BOC informs the exporter of the registration or non-registration within seven (7) working days after receipt of the complete set of documents by the Export Control Division (ECD) of the BOC.

The following documents are needed  to be submitted by the exporter to BOC: latest income tax return, Unique Reference Number (URN) for PEZA locators and Client Profile Registration System (CPRS) for non-PEZA locators, business permit, SEC/DTI registration, list of products applied for authorization to make invoice declaration and product evaluation report.

Exporters who are not manufacturers or producers, must have prior knowledge on how the goods were manufactured or produced and that they comply with the origin rules applied under Annex 22-03 in GSP. Finally, registered exporters shall be notified about the results of the application and shall be assigned with a REX number within seven (7) working days after receipt of the complete set of documents by the ECD. (GTM)

1. Signatory/Applicant is not authorized to apply (based on Board Resolution);
2. No Certificate of Employment (COE) and Authorization submitted (for Liaison Officer);
3. Multiple Origin/Destination Encoded/Written on Application Form;
4. Application Form Entries, Permit, Radio Message and Endorsement Letter from PNP Not Matching; and
5. No Proof of Business (for Sole Proprietor)

 

 

 

 

 

In a bid to suppress corruption, the Bureau of Customs (BOC) is now in its second phase of pilot testing the implementation of the 1-Assessment System in selected ports in the country.

1-Assessment which is formerly known as Enhanced Goods Declaration Verification System (EGDVS) is a web-based application which will institutionalize the “Zero Contact Policy” in the cargo clearance process. The system will randomly assign Customs examiners and appraisers to goods declaration filed, thus, removing the “suki system”.

As such, examiners, appraisers and brokers can now only communicate through the 1-Assessment portal. Pursuant to Customs Modernization and Tariff Act and other related laws and regulations, Customs Memorandum Order (CMO) 17-2018, which implements the system, provides sanction and penalties to violating parties. .

For transparency, the system also enables importers and brokers to obtain real-time status of their goods declaration lodged with the BOC.

The system will only cover “import consumption entries cleared under the formal entry process in all ports of entry.

Exempted from the 1-Assessment system, even if cleared under the formal entry process, are the (1) Super Green Lane shipments, (2) articles withdrawn from the Customs Bonded Warehouse for local consumption, (3) wastages under the Bonded Warehouse Regime and jet operation losses, (4) goods entered as temporary imports for subsequent re-exportation and (5) deferred payment of government.

To use the system, importers and brokers shall lodge their goods declaration through the Value Added Service Providers, who shall in turn transmit the E2M lodged goods declaration to the 1-Assessment system.

The brokers must then attach the supporting documents to the system. However, original hard copies of supporting documents and notarized copy of the Single Administrative Document (SAD) and Supplemental Declaration on Valuation shall be submitted to the Entry Processing Unit or equivalent office in the port for documents verification.

Another feature of the system is the randomly re-assignment of goods declaration that remained unattended for two hours.

The 1-Assessment system which is the second version of the EGDVS was already implemented at the Port of Manila and Manila International Container Port in October 2017.  Covered in the second-pilot implementation are the ports of Batangas, Clark, Limay, Subic and Surigao and the sub-ports of Bislig, Nasipit, Mariviles, Siain, Puerto Princesa and Bauan. Expected full implementation of the system will either be in December 2018 or in early 2019. (ARB)

President Rodrigo Duterte has signed into law the Ease of Doing Business (EODB) and Efficient Government Service Delivery (EGSD) Act of 2018. The new law will shorten the number of days in processing permits and licenses of all business-related transactions in the Philippines.

Signed on May 28, Republic Act (RA) No. 11032 also includes stricter rules like the two-strike policy that any violation will warrant penalties and liabilities for government officials who fail to issue permits in the given period.

The provisions of the law were highlighted in the 6th Annual Ease of Doing Business Summit recently held at the Philippine International Convention Center in Pasay City.

RA 11032 amends Republic Act No. 9485, otherwise known as the Anti-Red Tape Act of 2007.

Under this Act, businesses can expect streamlined processes; reduced processing times from all government agencies, including government-owned and controlled corporations (GOCCs). Government agencies shall be made to comply with the prescribed processing time: three working days for simple transactions, seven working days for complex transactions, and 20 working days for highly technical transactions.

Apart from streamlining, the law also provides for the creation of a central business portal that will receive and capture application data on business-related transactions, while a Philippine business databank will provide LGUs and national government agencies access to information to verify the validity and existence of businesses. With this, businesses are not required to submit the same documentary requirement previously submitted

This is pursuant to Department Order No. 11-2018 issued by the Department of Finance last 9 February 2018 which states that the “authority to accredit and register customs brokers and importers is reverted solely to the Bureau of Customs for purposes of simplification of process”.

The BOC also posted in its website the application forms for the accreditation. Said forms indicated that the applicant must also submit a list of Importable items with clear description in technical and tariff terms, estimated volumes and values for the next twelve (12) months.

Following the issuance of DO 11-2018, the BOC is now mandated to provide the BIR with a list of accredited importers and customs brokers for post-accreditation validation of tax compliance. In turn, the BIR shall notify immediately the BOC if there is a case of tax deficiency and non-compliance of accredited importers and customs brokers.

DO 11-2018 repealed DO 12-2014 and DO 18-2014 which required two-step accreditation process. Previous process requires importers and brokers to go through stringent verification procedure of BIR to secure Importers Clearance Certificate (ICC) and Brokers Clearance Certificate (BCC) respectively and submit the same as form part of the requirement of BOC accreditation.Since March 1, the Bureau of Internal Revenue has stopped accepting application for accreditation.

Exporters are encouraged by the Bureau of Philippine Standard (BPS) of the Department of Trade and Industry to comment on the proposed technical regulations of different countries on 151 products. The list is released by the World Trade Organization (WTO) through the WTO-TBT Enquiry Point at the BPS Standards and Conformance Portal (www.bps.dti.gov.ph). Said regulations cover Domestic and Commercial Equipment, Entertainment, Sports, Electrical Engineering, Fluid Systems and Components for General Use, Food and Beverages, Health Care Technology etc. to be exported to Brazil, Egypt, the European Union, Rwanda, the United States of America and other countries.

For more information, DTI-BPS may be reached at its email:  bps@dti.gov.ph and tel. no. (632) 751.4700.

Relevant government agencies have concurred to the urgency of the Philippine accession to the Istanbul Convention which will implement the ATA Carnet System.

The ATA Carnet is an international scheme that will allow tax-free and duty-free importation of commercial samples, professional equipment and articles for presentation or use in trade fairs, shows, exhibitions without customs formalities. It will also allow traders to use Carnet, a single document of goods that will pass through several customs territories and will be valid up to one (1) year. Hence, traders will save costs and time in clearing goods at the border.

Relevant agencies such as the Department of Trade and Industry (DTI) and Department of Finance (DOF) are urged to submit their respective Certificates of Concurrence (COC) to the Department of Foreign Affairs (DFA) by December 2017.

The DFA – United Nations and International Organizations (UNIO) leads in the preparation of the Instrument of Accession for the President’s approval. Director Roberto Manalo of the DFA-UNIO who serves as the chair of the technical working group on ATA Carnet, underscored the need for government agencies to support the promotion of export development through the ATA Carnet system.

He added that this is also in compliance to the Office of the President Memorandum Circular No. 27 issued last 6 October 2017 which directs government agencies to “strengthen the implementation of the Philippine Export Development Plan (PEDP).” –Asnia R. Bayabao