Rules and Regulations for the Implementation of Section 301 of the Tariff and Customs Code

September 20, 1991

DOF DEPARTMENT ORDER NO. 111-91

RULES AND REGULATIONS FOR THE IMPLEMENTATION OF SECTION 301 OF THE TARIFF AND CUSTOMS CODE

In view of the amendments brought about by the provisions of Presidential Decree No. 1464, otherwise known as the Tariff and Customs Code of 1978, and by authority of Section 301 thereof, as amended the following revised rules and regulations are hereby promulgated for the guidance of all concerned: cd

SECTION 1. Scope. — The provisions of this Department Order shall apply to any specific kind or class of foreign article which is imported or brought into the Philippines or which is being, or is likely to be sold in the Philippines at a price less than the fair value (home consumption value or, in the absence of such price, its cost of production) the importation or sale of which might injure, or retard the establishment of, or is likely to injure an industry producing like product in the Philippines.

SECTION 2. Shipments and/or Consignments Outside the Scope of this Department Order. — The following shipments and/or consignment shall not be subject to anti-dumping protest:

a. Articles imported by or consigned to, government agencies not organized for profit and particularly designated by law or proper authorities to import, directly or through awardees, such commodities as would stabilize and/or supplement shortages.

b. Conditionally duty-free importations allowable under Section 105 of the Tariff and Customs Code.

SECTION 3. Initiation of Dumping Proceedings:

a. If any local producer or manufacturer, whether a natural or juridical person, or head of any government agency, has reasons to believe that any article is being, or is likely to be, imported into the Philippines under circumstances as to bring it within the purview of Section 301 of the Tariff and Customs Code, he/it may communicate such belief and the reasons therefore in writing using DOF Form No. 6 (Dumping Protest) directly to either the Secretary of Finance or the Secretary of Trade and Industry.

b. The first agency to acquire jurisdiction over the protest shall preclude the other for purposes of determining a prima facie case.

c. A protest filed in either agency and rejected on the ground that the documents submitted/available fail to establish a prima facie case may not be considered if presented the second time unless additional information/data is submitted and found sufficient to establish a prima facie case.

SECTION 4. Prima Facie Case Determination.

a. If, after preliminary investigation, based on the data submitted with the dumping protest (DOF Form No. 6), a prima facie case of dumping is found to exist, the Secretary if Finance shall advise the Tariff Commission to conduct an investigation and at the same time instruct the Collector of Customs not to release the articles involved unless a bond in an amount equal to double the estimated dutiable value thereof is filed, in accordance with Section 301 e. of the Code.

b. Within thirty (30) days from receipt of an anti-dumping protest the Secretary of the agency that first acquires jurisdiction shall evaluate the data submitted/gathered and determine whether or not a prima facie case exists as to warrant a formal investigation.

c. During the determination of a prima facie case of dumping, a conference with the protestant and the importers shall be convened, if necessary.

d. Once a prima facie case has been determined and the case has been indorsed to the Tariff Commission for formal investigation the Department of Trade and Industry or Department of Finance loses authority to reconsider such finding and any new evidence relative thereto shall be forwarded to the Commission for consideration.

e. For purposes of a prima facie case determination, information on home consumption price furnished by the Philippine Trade Service Officer or Diplomatic Officers, pre-shipment inspection CRF reports and/or SGS data, or from newspapers, magazine or publication and other reliable sources may be considered sufficient proof of home consumption price to establish the price difference.

SECTION 5. Appraisement and Delivery of Articles Upon Filing of Bond. — Upon receipt by the Commissioner of Customs of instructions from the Secretary, he shall accordingly instruct the appraiser concerned to determine the dutiable value of the shipment involved so that the required bond could be filed. The Commissioner of Customs may only authorize the release of the articles involved strictly in accordance with the instructions from the Secretary of Finance. cdt

Articles which may have been delivered under Section 1503 of the Code during the sixty (60) days immediately preceding the filing of information, protest or complaint of possible dumping shall, pending investigation and final decision, be ordered returned to the custody of the Collector of Customs, unless released under bond as above indicated.

SECTION 6. Action of the Tariff Commission on Dumping Cases. — Upon receipt of advice, together with the pertinent records, from the Secretary of Finance that an information, protest or complaint merits inquiry to determine dumping, the Tariff Commission shall conduct an investigation to verify if the kind or class of article in question is being imported into, or sold or is likely to be sold in the Philippines at a price less than its fair value, the importation or sale of which might injure, or retard the establishment of, or is likely to injure an industry producing like product in the Philippines, and ascertain the difference, if any, between the purchase price and the fair value of the article. The investigation shall include a hearing or hearings where the owner, importer, consignee or agent by whom or for whose account the article is imported, the local producers of a like article and other parties directly affected shall have opportunity to be heard and to present evidence bearing on the subject matter of the investigation.

An official may be designated by the Secretary of Finance to attend hearing on dumping cases before the Tariff Commission.

SECTION 7. Definition of Terms. — For purposes of dumping:

(a) (1) The "purchase price" of an imported article shall be the price at which such article has been purchased or agreed to be purchased, prior to the time of exportation, by the person by whom or for whose account the article is imported, plus, when not included in such price —

a. The cost of all containers and coverings and all other costs, charges and expenses incident to placing the article in condition, packed ready for shipment to the Philippines;

b. The amount of any export tax paid in the country of exportation on the exportation of the articles to the Philippines;

c. The amount of any import duties imposed by the country of exportation which have been rebated, or which have not been collected, by reason of the exportation of the article to the Philippines; and

d. The amount of any taxes imposed in the country of exportation upon the manufacturer, producer or seller, in respect to the manufacture, production or sale of the article which have been rebated, or which have not been collected, by reason of the exportation of the articles to the Philippines.

Any additional costs, charges and expense incident to bringing the articles from the place of shipment in the country of exportation to the place of delivery in the Philippines, and the Philippines customs duties imposed thereon shall not be included.

(2) The "export price" or the "exporter's sales price" of an imported article as an alternative fair value shall be the price at which such article is sold or agreed to be sold to countries other than the Philippines, before the time of exportation, by and for the account of the exporter, including:

a. The cost of all containers and coverings and all other costs, charges and expenses incident to placing the article in condition, packed ready for shipment to the Philippines;

b. The amount of any import duties imposed by the country of exportation which have been rebated, or which have not been collected, by reason of the exportation of the article to the Philippines; and

c. The amount of any taxes imposed in the country of exportation upon the manufacturer, producer, seller in respect of the manufacture, production or sale of the article, which have been rebated, or which have not been collected, by reason of its exportation to the Philippines. The following amounts, if included, shall be deducted —

(1) The amount of costs, charges and expenses, and Philippine customs duties, incident to bringing the article from the place of shipment, in the country of exportation to the place of delivery in the Philippines;

(2) The amount of commissions, if any, for selling in the Philippines the particular article under consideration; cd

(3) An amount equal to the expenses, if any, generally incurred by or for the account of the exporter in the Philippines in selling identical or like article; and

(4) The amount of any export tax paid in the country of exportation on the exportation of the article to the Philippines.

(b) (1) The "fair value" of an article shall be its home consumption price (excluding internal excise taxes) or, in the absence of such value, its cost of production.

(2) The "home consumption price" of an imported article shall be the price at which such or like articles is bought and sold freely in the usual wholesale quantities and in the ordinary course of trade, on the date of exportation to the Philippines in the principal markets of the exporting country, for home consumption (excluding internal excise taxes), or, if not sold or offered for sale for home consumption, then for exportation to the countries other than the Philippines, including the cost of all containers, and coverings and/or packings of any kind and all other costs, charges and expenses incident to placing the article in condition packed ready for shipment to the Philippines, except that in the case of articles purchased or agreed to be purchased by the person by whom or for whose account the article is imported prior to the time of exportation, the home consumption price shall be ascertained as of the date of such purchase or agreement to purchase. For purposes of this section, no pretended sale or offer for sale, and no sale or offer for sale intended to establish a fictitious market, shall be taken into account. 

The home consumption price is unreliable if data are based on an association or a compensatory arrangement between the exporter and the importer or a third party, or if the quantity of the like or similar articles are sold by the producers for home consumption is negligible in relation to the quantity sold for exportation to countries other than the Philippines as to be inadequate basis for comparison.

If the home consumption price cannot be determined or is unreliable, the fair value of the article shall be based on any of the following rules applied in hierarchical order:

i. The export price of like articles sold to countries other than the Philippines. aisadc

ii. If the country of export is a state-controlled economy, the home consumption price of like articles in a proxy country at the same stage of economic development which is a proven or established competitive producer of the article under consideration.

iii. If the fair value of such or like article cannot be determined in accordance with the preceding paragraphs, then the fair value of the article under consideration shall be its cost of production as determined or calculated from reasonably available data including elements of comparable cost of domestic production.

iv. In the case where products are not imported directly from the country of origin but are exported to the country of exportation from an intermediate country, the fair value shall be the home consumption price in the country of origin or the country of export whichever is higher.

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

Whenever the trade service officers and/or diplomatic officers' reports are not available then pre-shipment CRF'S and/or data information provided by SGS or any other documentary evidence sufficient to establish the home consumption price may be used.

(c) For purposes of this section, "State-controlled economies" shall include countries whose production and export of the product in question are effectively controlled by their governments. For this purpose, the Tariff Commission shall consult appropriate government agencies particularly the Department 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.

(d) For purpose of this section, "proxy country," at the same stage of economic development refers to a country which is a proven or established competitive producer of the article under consideration. In the determination of what constitute a country at "the same stage of economic development", the Department of Trade and Industry and other pertinent government agencies may be consulted.

(3) The "cost of production" of an imported article shall be the sum of —

a. The cost of materials, and of fabrication, manipulation or other process employed in manufacturing or producing, identical or substantially identical article, at a time preceding the date of shipment of the particular article under consideration which would ordinarily permit the manufacture or production of the particular article under consideration in the usual course of business;

b. The usual general expenses not less than ten per cent (10%) of such cost in the case of identical or substantially identical articles;

c. The cost of all containers and coverings, and all other costs, charges and expenses incident to placing the article under consideration in condition packed ready for shipment to the Philippines; and

d. An addition for profit not less than eight per cent (8%) of the sum of the amounts determined under sub-paragraphs (a) and (b) hereof, equal to the profit which is originally added in the case of articles of the same general character as a particular article under consideration, by manufacturers or producers in the country of manufacture or production who are engaged in the general trade as the manufacturer or producer of the particular article under consideration.

(e) For purposes of this section, the "exporter" of an imported article shall be the person by whom or for whose account the article is imported into the Philippines. —

1. If such person is the agent or principal of the exporter, manufacturer or producer; or

2. If such person owns or controls, directly or indirectly, through stock ownership or control or otherwise, any interest in the business of the exporter, manufacturer or producer; or

3. If the exporter, manufacturer or producer owns or controls, directly or indirectly, through stock ownership or control or otherwise, any interest in any business conducted by such persons;

4. If any person or persons, jointly or severally, directly or indirectly, through stock ownership or control or otherwise, own or control in the aggregate twenty per cent (20%) or more of the voting power or control in the business carried on by the person by whom or for whose account the article is imported into the Philippines, and also twenty per cent (20%) or more of such power or control in the business of the exporter, manufacturer or producer.

SECTION 8. Determination of sales at less than fair value; fictitious sales; determination of injury; report of investigation. cdt

(a) In considering the fact or likelihood of sales at less than fair value, the price at which sales have been made to the Philippine market should be compared with the figure calculated to be the fair value. In making the comparison, the two prices should be reduced to comparable terms, the comparison to be based on a relatively simple calculation in arithmetic rather than by economic reasoning. Other circumstances which may cause differences as between price to the Philippines and home consumption price such as credit terms, quantity discounts, quality of products, market requirements, packing charges, advertising and selling costs, and other variations in methods of production and manufacture should also be taken into account.

(b) The determination of fair value shall be based on the following considerations whichever is applicable.

(1) Price in the country of exportation for home consumption on or about the date of purchase or agreement to purchase of article, or in case the article is brought to the Philippines on consignment basis, the date of the exportation thereof.

(2) If it is demonstrated that during a representative period immediately preceding the purchase or date of exportation of foreign articles in question, the quantity of like articles sold by the producers for consumption in the country of exportation is so small in relation to the quantity sold by such producer for exportation otherwise than to the Philippines, as to be an inadequate basis for comparison, then fair value shall be based on the price at which a like article is sold by the foreign producer for exportation to countries other than the Philippines on or about the date of purchase of the article imported into the Philippines or in case of the article imported on consignment, the date of exportation thereof.

(3) In the absence of, or inadequacy of information on (1) and (2) above, the fair value shall be based on the cost of production in the country of origin as defined in Section 7 (b) (3) hereof.

(4) In the case where products are not imported directly from the country of origin to be exported to the country of importation from an immediate country, the price of which the products are sold from the country of export to the country of importation shall normally be compared with the comparable price in the country of export. However, comparison may be made with the price in the country of origin, if for example, the products are merely transhipped through the country of export, without being introduced into the commerce of that country, or such products are not produced in the country of export, or there is no comparable price from them in the country of export.

(c) In determining injury, the following, in addition to other pertinent matters, shall be considered:

(1) Whether or not the articles under consideration are of a class or kind actually produced or manufactured in the Philippines in quantities sufficient to supply at least ten per cent (10%) of local consumption (arrived at by taking the sum of the average local production and average importation and subtracting therefrom average exportation; if any, for two years or any representative period immediately preceding the institution of dumping proceedings).

(2) The local counterpart goods are offered for sale to all wholesalers or retailers on equal terms under like conditions having regard to the local customs and usages of trade.

(3) The foreign articles under consideration directly, not remotely, have caused or may cause a downward trend of production, employment, prices, profits and wages in the domestic industry concerned, or a decline in sales, an increase in imports, (either actual or relative to domestic production), a higher or growing inventory, or a decline in the proportion of domestic market supplied by domestic producer of goods similar or identical to the imports.

(4) In determining whether the domestic industry has suffered or is being threatened with injury, the Commission shall determine whether the wholesale prices at which the domestic products are sold are reasonable, taking into account the cost of raw materials, labor, overhead, a fair return on investment and the over-all efficiency of the industry.

(5) A determination of threat of injury shall be based on facts and not merely on allegation, conjecture or remote possibility. Factors such as convincing information of substantially increased importations of the products, circumstances of developments in the market of the exporting country, among others, may be considered. The change in the circumstance which would create a situation in which dumping would cause injury must be clearly foreseen and immediate. 

(6) In determining whether a domestic industry that will produce like goods is being retarded in its establishment, there must be convincing evidence of the forthcoming establishment of the industry, like, the necessary machineries have already been installed ready for production, an order for raw materials has been made and that the production capacity of such industry is at least 20 per cent of local consumption.

"Like" articles within the meaning of Section 301 of the Tariff and Customs Code, as amended, is one that is made substantially of the same material, serves the same purpose and/or has approximately the same commercial value as the articles produced in the Philippines.

For purposes of determining "home consumption price: as defined in Section 7(a) (2) hereof transaction directly or indirectly between persons hereinbelow enumerated and the prices (purchase price or exporter's sales price) agreed upon between them may be disregarded as not reflecting the true price obtaining in the market under consideration:

a. Members of a family, including brothers and sisters (whether by whole or half-blood), spouses, ancestors and lineal descendants;

b. Any official or director of an organization and the organization itself;

c. Partners; aisadc

d. Employer and employees;

e. Any person directly or indirectly owning, controlling, or holding five per centum or more of the outstanding voting stocks or shares with right to vote of any organization and the organization itself;

f. Two or more persons directly or indirectly controlling, controlled by, or under common control, with, any person.

If a transaction is disregarded and there are no other transactions available for consideration, then the determination of the price shall be based on the best evidence obtainable of the transactions between persons not specified above.

SECTION 9. Report of the Tariff Commission. — The Tariff Commission shall submit a report to the Secretary of Finance within sixty (60) days after the parties have submitted their memorandum which should not be later than fifteen (15) days after the termination of the public hearing. The report shall include, among others a concise statement of the facts of the case, the main question at issue, and recommendation.

SECTION 10. Decision of the Secretary of Finance. — within sixty (60) days after receipt of the report of investigation from the Tariff Commission and the complete records of the case, the Secretary shall decide whether or not the articles in question are being imported into or sold in the Philippines in violation of Section 301 of the Code and if in the affirmative, the Secretary shall indicate therein the amount of dumping duty on the specific articles involved, and shall direct the Commissioner of Customs to cause the dumping duty to be levied, collected and paid, in addition to any other duties, taxes and charges imposed by law on such articles and on the articles of the same specific kind or class subsequently imported from the specific country. The decision of the Secretary shall be published in the official Gazette and in two (2) newspapers of wide circulation. The parties litigants, the Tariff Commission, the Bureau of Customs and other proper government agencies shall each be furnished with a copy of the decision. Should the Secretary decide that there is no violation of Section 301 of the Code, the Commissioner of Customs shall proceed to act on the importation, without regard to the question of dumping. The decision should contain an instruction to release and cancel any and all anti-dumping bonds filed.

SECTION 11. Levy and Collection of Dumping Duty. — Upon receipt of the decision of the Secretary of Finance declaring a finding of dumping, the Commissioner of Customs shall order the Collector of Customs concerned to proceed with the final appraisement of the articles covered by the dumping decision and shall:

(1) If the articles had been previously released under bond as provided in Section 5 hereof, require the party concerned to pay the corresponding duty, in addition to any ordinary duties, taxes and charges, if any;

(2) If the articles had not been previously released under bond, require the party concerned, prior to the actual release of the importation(s) concerned, to pay the corresponding dumping duty, in addition to any ordinary duties, taxes and charges, if any, or re-exported, for articles covered by (1) and (2) hereof, by the owner, importer, consignee or agent, at his option and expense when he so requests in writing, upon the filing of a bond in an amount equal to double the estimated dutiable value of the article, conditioned upon the presentation of a landing certificate issued by the Consular Officer of the Philippines at his country of destination.

The Commissioner of Customs shall likewise cause the assessment, levy and collection of the dumping duty on subsequent importation of articles of the kind or class as those found by the Secretary of Finance to constitute dumping. However, dumping duty to be imposed on subsequent importation based on the same decision, shall be equal to the difference between the actual purchase price and fair value existing at the time of importation. cd

Any change in the amount of the dumping duty to be collected and paid on subsequent importation shall be allowed only when authorized by the Secretary of Finance upon recommendation of the Tariff Commission which body shall take into account the actual purchase price and the fair value actually existing at the time of importation, in an indorsement to the Commissioner of Customs. The request for a different amount of dumping duty may be made by the owner , importer, consignee or agent of the importation concerned and filed with the Secretary of Finance.

The Collector of Customs concerned shall make quarterly reports, through the Commissioner of Customs to the Secretary of Finance, of collection of dumping duties on all foreign articles affected by decisions in dumping cases.

Any aggrieved party who is not satisfied with the application of a decision in dumping case shall state in writing to the Secretary of Finance the reasons for his grievance and the Secretary of Finance shall decide the same, furnishing the Commissioner of Customs with a Copy of said decision.

Whenever the Collector of Customs discovers that the purchase price and/or fair value appearing in the consular invoice, commercial invoice or other pertinent documents, covering a particular importation, is different from those contained in the dumping decision, he shall report such fact to the Secretary of Finance, together with the documents, and the Secretary of Finance shall indorse the papers to the Tariff Commission for study and recommendation.

SECTION 12. Method of Computing Duty. — The dumping duty shall be equal to the difference between the purchase price or the exporter's sales price, as the case may be, and the fair value (home consumption price or, in the absence thereof, cost of production) of the articles in question at the time of importation.

If it appears that the articles has been purchased by a person not the exporter as defined in Section 7 (c) hereof the dumping duty shall be equal to the difference between the purchase price and the home consumption price on the date of the purchase or agreement to purchase, and the home consumption price (or in the absence thereof, the cost of production). If the article is brought into the Philippines by consignment, or imported by a person who is the exporter thereof, the dumping duty shall be equal to the difference between the exporter's sales price and the home consumption price (or in the absence thereof, the cost of production) on the date of exportation.

SECTION 13. Conversion of Currencies. — The value and (prices quoted in foreign currency shall be converted into the currency of the Philippines at the current rate or value specified or published by the Central Bank of the Philippines on or immediately preceding the date to purchase or agreement to purchase whenever the purchase price is the determining factor, and on or immediately preceding the date of exportation of the articles whenever an exporter sales price is used as basis.

If the value and prices of the articles in question are in a foreign currency not included in the list of convertible currencies of the Central Bank, then the said foreign currency shall first be converted to United States dollar and then converted to Philippine peso as provided in the preceding paragraph.

SECTION 14. Motion for Reconsideration. — Any interested party of record who is dissatisfied with a decision in a dumping case may file a motion for reconsideration with the Secretary of Finance within fifteen days from notice thereof. The filing of such motion shall not, however, suspend the enforcement of the dumping decision. cdt

SECTION 15. Discontinuance of Dumping Duty. — An application for the discontinuance of the dumping duty shall be filed with the Secretary of Finance by any interested party in a form prescribed for the purpose which application shall be referred to the Tariff Commission for investigation.

An investigation with a view to discontinuance of dumping duty may be initiated upon its own motion by the Tariff Commission.

Whenever, after an investigation, it is ascertained that the conditions which necessitated the imposition of a dumping duty have ceased to exist, the Tariff Commission shall so report to the Secretary of Finance who shall take the necessary steps to discontinue the imposition of such duty. Any order made under this Section by the Secretary shall be published in the Official Gazette and in newspaper of general circulation.

SECTION 16. Appeal from Finding of Dumping by the Secretary of Finance. — Any aggrieved party may appeal only the amount of the dumping duty to the Court of Tax Appeals within thirty (30) days from the receipt of the decision or ruling of the Secretary of Finance. Failure to appeal within the period set for appeal shall render the decision of the Secretary of Finance conclusive upon all the parties.

SECTION 17. Adjustment of Dumping Duty. — The Tariff Commission shall conduct quarterly examination and/or verification of the home consumption price or in the absence thereof, the cost of production, and shall report its findings to the Secretary of Finance. If the Secretary of Finance finds from such report that there is a need for an adjustment in the amount of dumping duty, he shall direct the Commissioner of Customs to effect the necessary adjustment.

The Secretary of Finance shall advise the Finance Revenue Attaché, or if there is none in the place concerned, the Philippine Commercial Attaché or any diplomatic or consular official of the decision of the Ministry imposing dumping duty on the article or articles involved and shall require said official to submit a quarterly report on home consumption prices or in the absence thereof cost of production of said article/articles to the Department of Finance and Tariff Commission, thru his/her home office.

SECTION 18. Effectivity of Dumping Decision, Extension of Effectivity of Same. — Dumping decisions promulgated by the Secretary of Finance shall be effective for a period of five years from the time of its promulgation.

At least six (6) months before the expiration of five years from the promulgation of a dumping decision, the interested party may file with the Secretary of Finance any application for the extension of the effectivity of dumping decision, stating the reasons therefor and attaching documents and papers in support of said application.

The case shall be referred by the Secretary of Finance to the Tariff Commission for investigation and report on whether the conditions required by law for dumping still exist. The report of the Tariff Commission shall be submitted to the Secretary of Finance at least three (3) months before the expiration of the five year period of effectivity of dumping decisions.

Industries protected at present by dumping decisions for a period of five years or more from the dates of the promulgation of the dumping decisions concerned, may likewise file an application for extension with the Secretary of Finance within six (6) months from effectivity of Presidential Decree No. 1464, as amended, in accordance with the above procedure. Upon failure to file an application extension, said dumping decisions shall be deemed terminated.

SECTION 19. Publicity. — Philippine customs officials shall give due publicity to the provisions of this order.

SECTION 20. Repealing Clause. — Ministry Order No. 73-79 dated October 4, 1979 is hereby considered superseded by this Department Order. cd

SECTION 21. Effectivity.— This Order shall take effect immediately.

 

(SGD.) JESUS P. ESTANISLAOSecretary