DOJ Opinion No. 071, s. 2003

DOJ OPINION NO. 071 , s. 2003 September 15, 2003 Commissioner Remedios G. Nazareth Officer-in-Charge Tariff Commission 5th Flr., Philippine Heart Center Building East Avenue, Diliman, Quezon City M a d a m : This refers to your request for opinion on whether the Tariff Commission should conduct the review and monitoring of the safeguard action on ceramic floor and wall tiles as provided in the April 11, 2002 Decision of the Secretary of the Department of Trade and Industry (DTI). You state that the subject Decision of the Secretary of Trade and Industry, which found the application for safeguard measure by the Philippine Ceramic Product Manufacturers Association (PCPMA) to be in the public interest, imposed a definitive safeguard duty for a period of three (3) years on imported ceramic floor and wall tiles from various countries. It likewise mandated the Tariff Commission (Commission) to monitor and review the definitive safeguard measure imposed in accordance with Rules 15 and 16 of the Implementing Rules and Regulations (IRR) of R.A. No. 8800. 1 However, you state that on October 7, 2002, a Motion to Suspend the Imposition of the Definitive Safeguard Duty on Imported Ceramic Floor and Wall Tiles Pendente Lite was filed by petitioner Cebu Oversea Hardware Co., Inc. with the Court of Tax Appeals (C.T.A. Case No. 6479), which motion was granted by the CTA on April 2, 2003. In the said Motion, petitioner alleged that "the action of the Secretary of the DTI in increasing the definitive safeguard duty from P2.29/kg. as recommended by the Tariff Commission to P5.40/kg. lacks validity." Petitioner also questioned the act of the Secretary of the DTI of increasing the definitive safeguard duty contrary to the Commission's recommendation relying, among others, on the opinion of then Justice Hernando B. Perez that ". . . the findings of the Commission, whether positive or negative, on a petition for the application of a general safeguard measure are binding on the Secretary." TASCEc According to you, while the Commission is set to conduct the mid-term review and monitoring as provided for under Sections 15 and 16 of R.A. No. 8800, since the CTA has granted the Motion to Suspend the imposition of the Definitive Safeguard Duty on Imported Ceramic Tiles Pendente Lite, you are of the opinion that the conduct of the mid-term review and monitoring will violate the principle of sub judice . Hence, this query. Quoted below are the pertinent provisions of R.A. No. 8800 and its IRR: R.A. No. 8800 SEC. 13. Adoption of Definitive Measures . Upon its positive determination, the Commission shall recommend to the Secretary an appropriate definitive measure, . . . xxx xxx xxx The general safeguard measure shall be limited to the extent of redressing or preventing the injury and facilitate adjustment by the domestic industry from the adverse effects directly attributed to the increased imports : Provided, however, That when quantitative import restrictions are used, such measures shall not reduce the quantity of imports below the average imports for the three (3) preceding representative years, unless clear justification is given that a different level is necessary to prevent or remedy a serious injury. xxx xxx xxx The decision imposing the general safeguard measure, the duration of which is more than one (1) year, shall be reviewed at regular intervals for purposes of liberalizing or reducing its intensity . The industry benefiting from the application of a general safeguard measure shall be required to show positive adjustment within the allowable period. A general measure shall be terminated where the benefiting industry fails to show any improvement, as may be determined by the Secretary. xxx xxx xxx SEC. 15. Limitations on Actions . The duration of the period of an action taken under the General Safeguard Provisions of this Act shall not exceed four (4) years. Such period shall include the period, if any, in which provisional safeguard relief under Section 8 was in effect. The effective period of any safeguard measure, including any extensions thereof under Section 19 may not, in the aggregate, exceed ten (10) years. xxx xxx xxx SEC. 16. Monitoring . So long as any action taken under Section 13 remains in effect, the Commission shall monitor developments with respect to domestic industry, including the progress and specific efforts made by workers and firms in the domestic industry to make a positive adjustment to import competition. (1) If the initial application of action taken under Section 13 exceeds three (3) years, or if an extension of such action exceeds three (3) years, the Commission shall submit to the Secretary a report on the results of the monitoring, not later than the date which is the midpoint of the initial period, and of each such extension, during which the action is in effect. (2) The Commission, in the preparation of each monitoring report, shall conduct a hearing at which interested parties shall be given reasonable opportunity to be present, to present evidence, and to be heard. Implementing Rules and Regulations of R . A . No . 8800 RULE 15. Duration of the General Safeguard Measures . RULE 15. 1The duration of the period in which an action is taken under the General Safeguard Measures provisions of these IRRs shall not exceed four (4) years. Such period shall include the period, if any, in which provisional relief under Rule 8 was in effect. xxx xxx xxx RULE 15.6. The decision imposing a general safeguard measure, the duration of which is more than one (1) year, shall be reviewed at regular intervals for purposes of liberalizing or reducing its intensity. The industry benefiting from the application of a general safeguard measure shall be required to show positive adjustment within the allowable period. A general safeguard measure shall be terminated where the benefiting industry fails to show any improvement, as may be determined by the Secretary. xxx xxx xxx RULE 16. Monitoring of the Domestic Industry . RULE 16.1. So long as any action taken under Rule 13 remains in effect, the Commission shall monitor developments with respect to the domestic industry, including the progress and specific efforts made by workers and firms in the domestic industry to make a positive adjustment to import competition. xxx xxx xxx RULE 16.1.b. The Commission, in the preparation of each monitoring report, shall conduct a hearing at which interested parties, including the Department of Labor and Employment, shall be given reasonable opportunity to be present, to present evidence, and to be heard. Based on the above-quoted provisions of R.A. No. 8800 and its IRR, the decision imposing a general safeguard measure for more than a year shall be reviewed by the Commission at regular intervals for purposes of liberalizing or reducing its intensity and also to monitor developments in the domestic industry, including the progress and specific efforts made by workers and firms in the domestic industry to make a positive adjustment to import competition. However, since the imposition of the Definitive Safeguard Duty on the importation of ceramic floor and wall tiles, as approved by the Commission and increased by the Secretary, has been suspended by the CTA, there would be, as of the moment, nothing for the Commission to review and monitor much more evaluate its impact on the domestic industry. It would be different, however, if what was covered by the suspension is only the difference in the duty as recommended by the Commission and the amount as increased by the DTI Secretary because in that case, the Commission can already conduct a review of the impact of its recommended imposition on the domestic industry which benefited from the imposition. Please be guided accordingly. Very truly yours, (SGD.) SIMEON A. DATUMANONG Secretary Footnotes 1. Safeguard Measures Act.