DOJ Opinion No. 038, s. 1982

DOJ OPINION NO. 038 , s. 1982 March 16, 1982 MEMORANDUM For: The Prime Ministe r This refers to your request for opinion "regarding the form of ratification of the [RP-US Tax] Treaty". The within papers disclose that in 1976, a tax treaty was entered into between the Government of the Philippines and of the United States for the avoidance of double taxation and the prevention of financial evasion with respect to taxes on income. The said agreement was ratified by the Philippine Government through an instrument of ratification executed by the President on March 31, 1981, while, on the other hand, the United States Government ratified the same on January 20, 1982, upon the advice and consent of the US Senate, which ratification was, however, made subject to certain "reservations and understandings". The "reservations/understandings" incorporated by the US Government in its ratification of the tax treaty in question naturally necessitate another ratification by the Philippine Government in order that it may be bound thereby. The Prime Minister's request for opinion regarding "the form of ratification" for the subject treaty would encompass the manner of the ratification thereof. We do find nothing objectionable in the form of the draft instrument of ratification of the "reservations/understandings" embodied in the accompanying papers which merely follows the format of the original instrument of ratification. The appropriate official who should ratify treaties and other international agreements in democratic governments is the head of its executive department, who gave the full powers to those who negotiated and/or signed the agreement. In some instances, it is constitutionally required that the ratification be subject to the concurrence of another state office/official. Thus, Section 14(1), Article VIII of the Philippine Constitution reads: "SEC. 14(1). Except as otherwise provided in this Constitution, no treaty shall be valid and effective unless concurred in by a majority of all the Members of the Batasang Pambansa." As already noted, however, the tax treaty in question has already been ratified by the President and, in this connection, it is pertinent to observe that the ratification was made after martial law had already been lifted. The clear implication is that the President did not ratify the agreement in the exercise of his lawmaking powers incident to the martial law regime but in the discharge of his executive power in confirming the acts executed by his plenipotentiaries in negotiating and/or signing the document. Such act is constitutionally justifiable under the following provision of Section 16, Article XIV of the Constitution which states: "SEC. 16. Any provision of paragraph one, Section fourteen, Article Eight and of this Article notwithstanding, the President may enter into international treaties or agreements as the national welfare and interest may require." LexLib We must assume that the President had entered into the subject tax treaty in the exercise of his prerogative conferred by the foregoing provision of the charter upon a finding that the national welfare and interest require that he enter into said treaty. It necessarily follows that any and all amendments to said treaty should be adopted by virtue of the same provision and in accordance therewith. It would indeed be illogical if modifications to said treaty, such as the reservations and understandings added hereto by the US Senate which do not after all constitute a new or separate treaty, should still require the concurrence of the Batasang Pambansa under the provisions of Section 14(1), Article VIII of the Constitution, supra , when the treaty itself was ratified without need of such legislative assent. Furthermore, it is an implied condition in negotiations with foreign powers that the treaties concluded by the executive branch of the government shall be subject to ratification in the manner prescribed in the fundamental laws of the state (Doe vs. Braden, 16 How [US] 635, 14 L Ed 1990). The original treaty, as already said, was ratified without need of parliamentary concurrence, pursuant to Section 16, Article XIV of the Constitution, above-quoted. Thus, requiring the approval of the Batasang Pambansa for amendments to the treaty would raise doubts on the part of the US Government as to whether the original ratification was valid and proper. WHEREFORE, we are of the opinion that the reservation and/or understandings imposed by the US Government on its ratification of the RP-US Tax Treaty may be ratified in the same manner that the treaty in its original form was ratified by the Philippine Government, i.e., by an instrument of ratification executed by the President of the Philippines without need of parliamentary action. March 16, 1982. Respectfully submitted: (SGD.) RICARDO C. PUNO Minister of Justice