DOJ Opinion No. 125, s. 1995

DOJ OPINION NO. 125 , s. 1995 December 7, 1995 Acting Secretary C. B. Bautista Department of Trade and Industry 361 Sen. Gil J. Puyat Avenue Makati City Sir : This refers to your request for opinion on whether or not there is need for the Philippine Congress to ratify the Agreements and Protocols mentioned hereunder to be signed during the meeting of the ASEAN Heads of Government in Bangkok, Thailand on December 14-15, 1995; "i) Framework Agreement on Services; ii) Framework Agreement on Intellectual Property Cooperation. iii) Protocol to Amend the Framework Agreement on Enhancing ASEAN Economic Cooperation; iv) Protocol to Amend the Agreement on the Common Effective Preferential Tariff (CEPT) for the ASEAN Free Trade Area (AFTA); and v) Protocol to Amend the Agreement on ASEAN Preferential Trading Arrangements (PTA)." You state that the first two Arrangement are new Agreements which spring from the 1992 Framework Agreement to enhance ASEAN Economic Cooperation signed in Singapore on January, 1992; and that as the said Agreement has been considered as an Executive Agreement, legislative concurrence was not sought by the Executive Department. It is your Department's position that Senate ratification is no longer necessary as regards the last two Protocols since they are "documents which merely implement in concrete detail the concepts and policy formulated in the Agreement on the ASEAN PTA earlier ratified"; and that Section 402 of the Tariff and Customs Code is still a valid justification on why Senate concurrence may be dispensed with. llcd Subject to the extended discussion hereunder, it is our opinion that the subject Agreements and Protocols do not require Senate concurrence. The ratificatory authority of the Senate over treaties and international agreements is founded upon the following constitutional provision, to wit: "Sec. 21. No treaty or international agreement shall be valid and effective unless concurred in by at least two-thirds of all the Members of the Senate". (Art. VII, 1987 Constitution) However, the President's authority to enter into binding international agreements without need of Senate ratification has long been recognized. In one case, the Honorable Supreme Court ruled as follows: ". . . the right of the Executive to enter into binding agreements without the necessity of subsequent Congressional approval has been confirmed by long usage . From the earliest days of our history we have entered into executive agreements covering such subjects as commercial and consular relations , most-favored-nation rights, patent rights, trademark and copy-right protection , postal and navigation arrangements and the settlement of claims. The validity of these has never been seriously questioned by our courts . (Emphasis Supplied) xxx xxx xxx "Agreements concluded by the President which fall short of treaties are commonly referred to as executive agreements and are no less common in our scheme of government than are the more formal instruments treaties and conventions. They sometimes take the form of exchanges of notes and at other times that of more formal documents denominated 'agreements' or 'protocol'". . . . They cover such subjects as the . . . commercial relations generally, . . ., the registration of trademarks and copyrights, etcetera . . ." (Commissioner of Customs v. Eastern Sea Trading, 3 SCRA 351, quoting 39 Columbia Law Review, pp. 753-754). In consonance with established judicial precedents, this Department has, in previous opinions, ruled that Section 21, Art. VII of the present Constitution which requires Senate concurrence of "treaties and agreements" does not envisage executive agreements which may be validly entered into by the President without need of Senate ratification (Sec. of Justice Ops. No. 71, s. 1992; No. 71, s. 1988). In the last-cited opinion, this Department has ruled on the issue that trade agreements need not be subjected to legislative conformity. Said Opinion reads in part: "While it might be argued that . . . (1) investment(s) agreements may be categorized as executive agreements since they deal on commercial relations and/or implement well-defined national policies on foreign investments (see Commissioner vs. Eastern Sea Trading, 3 SCRA 351) and, in line with this Department's Opinion 71, series 1987, are not within the contemplation of Section 21, Article VII of the [1987 Constitutional] hence, not subject to Senate concurrence, it has been said that whether or not an international agreement becomes binding upon signature or requires ratification would depend upon the intention of the parties, when the same is ascertainable (Brownlie, Public International Law, 2nd Ed. p. 586; O'Connel, International Law, Vol. I 1965 Ed., p. 245). Indeed, a leading authority in international law opines that even a protocol, declaration or exchange of notes need ratification when specifically stipulated (Oppenheim-Lauterpacht, Vol. 1, 8th Ed., pp. 907-908). In this connection, it is noted that in Philippine diplomatic experience, there were instances of trade and postal agreements, which are admittedly executive agreements, but have been subjected to ratification by former President Marcos, as the sole repository of lawmaking authority (see the Philippine-Gabonese Trade Agreements dated September 11, 1978, Treaty Series. Vol. VII pp. 515-518 & 826-834, respectively). On the other hand, the Trade Agreement between the Philippines and Indonesia dated May 30, 1969 and the Philippine-French Investment Promotion Agreement dated June 14, 1976 were not subjected to ratification by the legislative authority (Philippine Treaty Series, supra, Vol. VI, pp. 192-195 & Vol. VII, pp. 493, 496, respectively)." (Emphasis ours.) "Thus, if, the bilateral investments agreements stipulate that legislative ratification is required for the validity and binding effect thereof, then said agreements should, in accordance with the intention of the parties, be subject to Section 21, Article VII, of the 1987 Constitution. Otherwise, the bilateral investments agreements may be deemed valid and binding upon the government upon signing thereof by the President or the proper official duly authorized by him to sign on his behalf without need of Senate concurrence if that is also the ascertainable intention of the parties thereto, provided (1) that the agreement is purely executive in nature, meaning, it concerns matter falling within exclusive presidential prerogative such as (a) adjustments of details carrying out with established national policies or (b) arrangements more or less temporary in nature, or (c) matters involving the exercise of an exclusive Presidential power under the Constitution, and thereby not transgressing any law, or (2) that the agreement is entered into in pursuance of an act of Congress." The need for Senate ratification of the subject agreements and protocols should be determined in accordance with the aforesaid rules. The ASEAN Framework Agreement on Services, defines in general the areas of cooperation among the member States in pursuit of the following objectives: (1) to enhance cooperation in services among them; (2) to eliminate substantially restrictions to trade in services among them; and (3) to liberalize trade in services. The agreement provides for future negotiation of specific commitments. As drafted, this agreement can be considered an executive agreement which does not require Senate concurrence. It should be stressed however, that specific commitments to be negotiated in the future thereunder must be consistent with existing laws, such as our nationalization laws. Otherwise, Senate concurrence may have to be obtained for specific commitments which do not conform with existing laws. With regards to the ASEAN Framework Agreement on Intellectual Property Cooperation, Senate ratification also is unnecessary. In particular, we note that the agreement recognizes the national laws of the member States as follows: "Nothing in this Agreement shall prejudice any existing or future bilateral or multilateral agreement entered into by any Member State or the national laws of each Member State relating to the protection and enforcement of intellectual property rights." Similarly, the Framework Agreement on Enhancing ASEAN Economic Cooperation is couched in general terms. We do not find any specific commitment which may go beyond the constitutional prerogatives of the President. Moreover, where there are details such as the undertaking to encourage and facilitate free movement of capital and other financial resources including further liberalization of the use of ASEAN currencies in trade and investments, the agreement provides that the respective national laws, monetary controls and developmental objectives of the Member States are to be taken into account (Art. 2[c][2]). With respect to the subject Protocols, we agree with your view that they are not subject to Senate ratification as they only implement the policies formulated in existing Agreements which have earlier been ratified. Moreover, the amendments of certain provisions of the existing Agreements are mere adjustments of detail so as to reflect the latest developments in the ASEAN. These Protocols come within the ambit of our ruling in Opinion No. 71, series of 1992. Finally, we concur with your view that Section 402 of the Tariff and Customs Code which is also cited in the aforecited opinion, is a valid justification on why Senate concurrence on subject Protocols may be dispensed with. The said provision of law provides: "a. For the purpose of expanding foreign markets for Philippine products as a means of assistance in the economic development of the country, in overcoming domestic unemployment, in increasing the purchasing power of the Philippine peso, and in establishing and maintaining better relations between the Philippines and other countries, the President, is authorized from time to time: (1) To enter into trade agreements with foreign governments or instrumentalities thereof; and (2) To modify import duties (including any necessary change in classification) and other import restrictions as are required or appropriate to carry out and promote foreign trade with other countries: Provided, however, That in modifying import duties or fixing import quota the requirements prescribed in subsection 'a' of Section 401 shall be observed: Provided, further, That any modification of import duties and any fixing of import quotas made pursuant to the Agreement on ASEAN Preferential Trading Arrangements ratified on August 1, 1977 shall not be subject to the limitations of aforesaid Section 'a' of Section 401." The said Protocols fall within the class of executive agreements entered into in pursuance of an act of Congress. Accordingly, this Department reiterates its opinion that the subject Agreements and Protocols do not require Senate ratification. Very truly yours, (SGD.) TEOFISTO T. GUINGONA, JR. Secretary