Prescribing Safeguards for Domestic Industries Upon the Lifting of Import Licensing for Certain Products

December 16, 1985

EXECUTIVE ORDER NO. 1073

PRESCRIBING SAFEGUARDS FOR DOMESTIC INDUSTRIES UPON THE LIFTING OF IMPORT LICENSING FOR CERTAIN PRODUCTS

WHEREAS, the lifting of redundant import licensing is an important component in the economic recovery program;

WHEREAS, domestic industries need to be assured of effective tariff protection and efficient mechanisms against unfair trade practices of some countries and/or unscrupulous activities of certain importers;

WHEREAS, certain provisions of the Tariff and Customs Code need to be clarified for the effective implementation of the anti-dumping measure and customs valuation procedures;

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers vested in me by the Constitution, by Section 401 of Presidential Decree No. 1464 and by Presidential Decree No. 1416, as amended, do hereby order and ordain:

I. Lifting of Redundant Import Licensing

SECTION 1. The Central Bank shall eliminate import licensing requirements prescribed under Central Bank Circular No. 1029 for all products, except for such products as may be determined by the Ministry of Trade and Industry to require continued regulation of imports, in view of production and market considerations, for a period of one year, unless otherwise extended upon recommendation by the Ministry of Trade and Industry after consultation with the private sector and other agencies concerned.

II. Establishment of an Anti-Import Surge Mechanism

SECTION 2. The Central Bank, upon determination by the Ministry of Trade and Industry of an unreasonable surge in imports of any product, which injure or is likely to injure a local industry and/or the economy in general, shall immediately prescribe the monitoring of imports by an appropriate government agency, by requiring importers to secure the approval of the designated agency prior to undertaking importation through letters of credit, D/A, O/A, and other arrangements, for the purpose of averting irreparable damage to the local industry.

The Ministry of Trade and Industry shall determine and accordingly recommend to the Central Bank the termination of such monitoring of imports when the domestic industry shall have achieved a stable production level and when the market for its product(s) shall have normalized. casia

III. Creation of the Import Valuation Rveiew Committee

SECTION 3. An Import Valuation Review Committee is hereby created composed of a representative of each of the Board of Investments, as Chairman, Bureau of Customs, and Central Bank and two representatives from the private sector, one representing the domestic manufacturers and the other representing the importers. The Committee shall hear complaints of domestic manufacturers regarding import valuation of particular commodities. The Committee shall submit its findings on any improper valuation to the Commissioner of Customs who shall act immediately to resolve the matter.

IV. Creation of an Inter-Agency Inspection Team

SECTION 4. An Inter-Agency Inspection Team composed of representatives of the Ministry of Trade and Industry as Chairman, the Bureau of Customs, and the Central Bank is hereby created to conduct on the spot investigation of traders, wholesalers, retailers and other parties reported to trade and/or to be in possession of goods imported in violation of import licensing and Customs regulations. For this purpose, the Team shall have the authority to require suspected violators to present proof of authorized importation of products. The Team, upon deputization by the Bureau of Customs, shall be empowered to seize said products in the event that the suspected violators are unable to prove authorized importation of said products and/or compliance with import and customs procedures. The Team may be provided with the necessary military or police assistance if warranted.

V. Strengthening Anti-Dumping Measure

SECTION 5. The Ministry of Trade and Industry is hereby authorized to certify to the existence of a prima facie case of dumping. Upon receipt of such certification from the Ministry of Trade and Industry, the Ministry of Finance, through the Bureau of Customs, shall require the owners, importers, consignees, or agents, of the product in question from the country which is the subject of the anti-dumping protest, to file a bond in the amount equal to twice the estimated dutiable value of the articles in question, in accordance with Section 301e of the Code, prior to release by the Bureau of the import shipments of such products.

SECTION 6. To effectively implement the provisions of the Presidential Decree No. 1999 on anti-dumping and to improve the effectiveness and efficiency of anti-dumping procedures, the following are hereby adopted:

a) Where the home consumption value of the product which is the subject of an anti-dumping protest is unreliable, the export price of such product or of like articles exported to countries other than the Philippines may be used as the fair market value of such product, provided that such price is a reliable price. In the absence of a determinable reliable price, the Ministry of Trade and Industry shall determine and establish the home consumption value.

b) State-controlled economies, for purposes of Section 301 of the Tariff and Customs Code, shall include countries whose production and export of the product in question are effectively controlled by the government of the exporting country. For this purpose, the Tariff Commission shall consult appropriate government agencies particularly the Ministry of Trade and Industry, in determining the existence of effective control of a particular industry or economic sector by the government of the exporting country.

c) The Tariff Commission, in determining the fair market value of a product which is the subject of an anti-dumping protest, pursuant to Section 301 of the Tariff and Customs Code, can impute comparable domestic costs in determining the cost of production of such product in case data on the actual cost of production is not available.

d) Where it is not possible for the Tariff Commission to determine the fair market value of a product which is the subject of an anti-dumping protest using the procedures provided in Presidential Decree No. 1999, the Commission may request the Ministry of Trade and Industry to determine the fair market value of such product, which determination shall be final and conclusive.

e) The Tariff Commission shall have the power to adopt a reasonable compromise by the concerned parties on the fair market value of the product which is the subject of an anti-dumping protest, which value shall be the basis for determining the dumping duty which shall be imposed on exports from the country in question, in order to facilitate the conclusion of the case.

VI. Strengthening Countervailing Measure

SECTION 7. The Ministry of Trade and Industry is hereby authorized to certify to the existence of a prima facie countervailing case against any article imported into the country and which is directly or indirectly granted bounty, subsidy or subvention upon its production, manufacture or exportation in the country of origin and/or exportation. Upon receipt of such certification from the Ministry of Trade and Industry, the Ministry of Finance through the Bureau of Customs, shall immediately require the filing of countervailing bonds for importations entered during the pendency of the countervailing proceedings.

VII. Disposal of Abandoned and Seized Products

SECTION 8. Where an importer abandons a shipment of the product which is the subject of an anti-dumping protest, the Bureau of Customs shall export such product directly or through the appropriate government agency or sell the product with preference to an injured party (local producer) at a negotiated price, taking into consideration potential revenue to the government and the damage due to lost production.

SECTION 9. Any product subject to import licensing but imported without prior clearance of the designated import regulating or monitoring agency, as provided for in Sections 1 and 2 of this Executive Order, shall be seized by the Bureau of Customs, which shall then export such product directly or through the appropriate government agency or sell the product with preference to an injured party (local producer) at a negotiated price taking into consideration potential revenues to the government and the damage due to lost production. acd

SECTION 10. Suppletory Provision. — The provisions of Sections 8 and 9 notwithstanding, the Bureau of Customs may apply Section 2603 and relevant provisions of the Tariff and Customs Code on the disposal of abandoned and seized products when it deems it a more appropriate procedure under the circumstances.

VIII. Compliance with Product Quality Standards

SECTION 11. As may be determined by the Ministry of Trade and Industry, imports of any item may be required to meet product quality standards set by the Product Standards Agency and/or other appropriate agencies.

IX. Other Provisions

SECTION 12. The provisions of LOI 1255 as amended by LOI 1294, LOI 658-B, LOI 964 as amended by LOI 1108, LOI 389 as amended by LOI 1086, LOI 1367, PD 704, and other issuances inconsistent with this Executive Order are hereby repealed or amended accordingly.

SECTION 13. Effectivity. — This Executive Order shall take effect on January 1, 1986. cd

DONE in the City of Manila, this 16th day of December, in the year of our Lord, Nineteen Hundred and Eighty-Five.

Published in the Official Gazette, Vol. 81 No. 52 page 6040 on December 30, 1985.