Repeal of the Memorandum of Understanding dated June 8, 1973 By and Between the Bureau of Forest Development, Bureau of Internal Revenue, Anti-Smuggling Action Center and Philippine Constabulary, Subject of Revenue Memorandum Circular No. 28-73 dated June 15, 1973, and Enforcement of that dated October 31, 1973 By and Between the Same Parties-Government Agencies

November 19, 1973 REVENUE MEMORANDUM CIRCULAR NO. 64-73 SUBJECT : Repeal of the Memorandum of Understanding dated June 8, 1973 By and Between the Bureau of Forest Development, Bureau of Internal Revenue, Anti-Smuggling Action Center and Philippine Constabulary, Subject of Revenue Memorandum Circular No. 28-73 dated June 15, 1973, and Enforcement of that dated October 31, 1973 By and Between the Same Parties-Government Agencies TO : All Revenue Regional Directors, Revenue District Officers, and Others Concerned For the information and guidance of all concerned, there is enclosed herewith a copy of the memorandum of understanding dated October 31, 1973 referred to above which is deemed an integral part hereof which repealed that dated June 8, 1973, inviting attention to the functions and duties of each office/bureau. To attain the objectives of the said memorandum of understanding, it is hereby directed that all concerned be guided accordingly and give this circular as wide a publicity as possible. cdt MISAEL P. VERA Commissioner of Internal Revenue TAN-1601-593-5 ANNEX MEMORANDUM OF UNDERSTANDING ON SEIZURE/DISPOSAL OF ILLEGALLY CUT LOGS/LUMBER AND ARREST/DETENTION OF OFFENDERS WHEREAS, pursuant to Proclamation No. 1081, dated September 21, 1972, Presidential Decree No. 54, dated November 16, 1972, was promulgated prescribing penalties upon offenders violating existing forestry laws, and other pertinent laws, rules and regulations; WHEREAS, in spite of said Presidential Decree, it has been noted by the duly constituted authorities that there is scarcity and corresponding increase in price of lumber in the local market, caused among other things, by increased exportation thereof, lack of coordinated supervision among interrelated government agencies in the implementation of forestry laws, rules and regulations and inadequate enforcement of the same especially those on logging operations; WHEREAS, in a Memorandum to the Secretary of National Defense, dated June 6, 1973 the President, thru his Executive Secretary has directed that : a. "Have those illegally cut logs not only impounded but also confiscated and taken to the nearest sawmill at the expense of the offender"; b. "Have the sawmill operator saw these logs to correct sizes for use in government constructions, the nominal cost of sawing to be charged to the government entity that will utilize the lumber." WHEREAS, in line with the above-mentioned Memorandum, the Secretary of National Defense has directed the Chief of Constabulary, in a Memorandum dated June 11, 1973, to: "prepare and submit as soon as possible, a paper that would comprehend the entire gamut of procedural implementation required on the matter, to include but not necessarily limited to, coordination/assistance areas indicated as necessary to be extended to and/or by other government offices/entities, for the effective and efficient prosecution of the project," that is, to sequester illegally cut logs for use by the government in its projects and within the context of the guidelines laid down in the aforesaid memorandum of the President; NOW, THEREFORE, WE, the undersigned heads of bureaus, offices and agencies of the government hereby come to an understanding to enforce the provisions of Presidential Decree No. 54, dated November 16, 1972, and implement the aforesaid Memorandum of the Office of the President to the Secretary of National Defense, dated June 6, 1973, in the manner following: 1. Definition of terms : Illegally cut, gathered, transported, declared, classified, misdeclared and possessed logs or lumber are those which were cut, gathered, transported, declared, classified or possessed without the pertinent papers or documents, made in violation of pertinent laws, rules and regulations. 2. Procedure on the checking/seizure/disposal of lumber or logs: The following procedure shall be followed in order to insure the legality and propriety of future actions of the PC in coordination with other government agencies involved in this Agreement from the time the sawed logs or lumber are used in government constructions and other authorized purposes. After the logs/lumber are confiscated and brought to the nearest sawmill, the Commanding Officer of the unit or element which effected the seizure shall ascertain the following: a. Auxiliary Invoice properly accomplished and signed under oath by the licensee, his authorized agent or possessor; b. In case the logs and lumber are for export license/permit of the lumber concession, receipts for the payment of all fees, charges and other dues or payments pursuant to existing laws, rules and regulations; c. When the logs are being transported from the source to the lumberyard Certificate of Origin, under oath duly issued by the appropriate forestry officer or officers; d. Official Receipt evidencing payment of forest charges, fees, surcharges and penalties; e. Copy of the Special Power of Attorney if the above requirements are signed by an agent/representative of the licensee; and f. Sawmill permit number, log and lumber dealer permit in case of domestic sale which shall be indicated on the face of the Auxiliary Invoice. 3. Penalties : a. First Offense (1) Confiscation of the logs/lumber involved in the offense and disposition thereof in the manner provided herein. (2) Imposition and collection of fine or fines due in accordance with existing laws, rules and regulations; and (3) In the case of lumber concessionaires, suspension of license and permit to operate for a period of six (6) months during the cutting season or period; or criminal prosecution before competent courts for violation of the pertinent laws in case the offender is not a licensed lumber concessionaire. b. Second Offense (1) Confiscation of the logs/lumber in question and disposed off in the manner provided herein; (2) Payment of the fine or fines due in accordance with existing laws, rules and regulations; (3) Immediate cancellation of the license, franchise and/or permit to operate; and (4) Arrest and detention of license, franchise holder and other offenders. 4. Specific Functions and Duties : a. Chief of Constabulary, thru the different Provincial Commanders shall: (1) Provide security and protection to any government officer or team authorized to conduct investigation under and by virtue of these present and other pertinent laws, rules and regulations on the matter; (2) Carry out the arrest/detention of offenders until released by proper authority; (3) Seize and confiscate illegally cut, gathered, transported, declared, classified and possessed logs or lumber and cause the delivery thereof to the licensee, cutter, gatherer, transporter, declarer, classifier, or possessor who shall be jointly and solidarily liable in conjunction with paragraph two (2) hereof. (4) Have the sawmill operator/owner process these logs into desired sizes based on a predetermined purpose of use or uses which shall be and in their order of priority for constructions as follows: (a) Those of the Armed Forces of the Philippines; (b) Those of Local Governments; (c) For School Buildings; and (d) For Infrastructure. In any of the above construction coordination with the end user office, or entity, before the processing is imperative. The nominal cost of the processing of the logs shall be at the expense of such office or entity. (5) Within thirty (30) days, after an action is taken, report to the Secretary of National Defense with copies thereof furnished the President shall be made by the Commanding Officer of such unit that undertook such action, and within the same period, that is after construction, the recipient office agency entity shall likewise make such similar report. b. Bureau of Forest Development The duties incident to the measuring of Forest Products shall be discharged by the Bureau of Forestry Development, under regulations of the Department of Agriculture and Natural Resources. (1) Determine period of cutting and issue order of suspension of license and/or permit for first offense; immediate cancellation of license and/or permit for second offense, in writing and arrested by other members; and both instances the orders shall be approved by the Secretary of Agriculture and Natural Resources. (2) Spell out specific forestry violations committed and advise/inform the violators accordingly, in writing; and (3) Perform scaling job. c. Anti-Smuggling Action Center: (1) Provide intelligence reports to law-enforcement agencies; and assist, liaison and coordinate with other agencies like Bureau of Customs, BIR and Bureau of Labor, as the need arises in all apprehensions/confiscation activities; (2) Facilitate determination of rightful informants and expedite grant of awards; (3) Keep records of apprehensions/confiscations in addition to their anti-smuggling efforts; and (4) Cause the delivery of illegally cut, gathered transported, declared, classified, possessed logs or lumber to the nearest sawmill at the expense of the violators, if no PC unit or element is available to effect such seizure or confiscation. d. Bureau of Internal Revenue (1) The invoicing and collection of forest charges shall be done by the Bureau of Internal Revenue under regulations approved by the Secretary of Finance, pursuant to Title VIII, Chapter V (Charges on Forest Products) of the National Internal Revenue Code, as amended by Presidential Decree No. 69 effective 1 January 1973. (2) Administer oath of the licensees after accomplishing BIR Forms Nos. 14.04 for timber and 14.05 for minor forest products and insure that they contain true payment of forest charges, fees, surcharges and penalties. (3) To examine books of accounts and other records of the licensee or other persons involved when the need therefor arises. The PC, BFD, and ASAC as a team shall coordinate their activities in the provincial/regional levels in the implementation of this Memorandum of Understanding. This Memorandum of Agreement repeals that which is dated June 8, 1973, executed by and between the same parties-government agencies referred to herein. IN WITNESS WHEREOF, we hereby set our hands this 31st day of October 1973 at Quezon City, Philippines. FIDEL V. RAMOS MISAEL P. VERA Brigadier General, AFP Commissioner Chief of Constabulary Bureau of Internal Revenue JOSE VIADO PELAGIO A. CRUZ Acting Director Lt General, AFP (Ret) Bureau of Forest Development Chairman, ASAC