Rules and Regulations to Implement E.O. No. 375, s. 2004

April 12, 2006

JOINT DTI-BOI, DOF, NEDA AND BOC ADMINISTRATIVE ORDER NO. 01-06

RULES AND REGULATIONS TO IMPLEMENT EXECUTIVE ORDER NO. 375, ENTITLED "MODIFYING THE RATES OF IMPORT DUTY ON CERTAIN IRON AND STEEL PRODUCTS UNDER SECTION 104 OF THE TARIFF AND CUSTOMS CODE OF 1978 (PRESIDENTIAL DECREE NO. 1464, AS AMENDED)"

Pursuant to Section 4 of Executive Order No. 375, the following rules and regulations are hereby promulgated.

RULE I

Definition of Terms

SECTION 1. For purposes of these rules and regulations, the following definitions shall apply:

(a) "Board" shall refer to the Board of Investments.

(b) "NEDA" shall refer to the National Economic and Development Authority

(c) "DOF" shall refer to the Department of Finance

(d) "TC" shall refer to the Tariff Commission

(e) "BOC" shall refer to the Bureau of Customs.

(f) "GSPI" shall refer to Global Steel Philippines (SPV-AMC), Inc.

(formerly, Global Steelworks International, Incorporated)

(g) "E.O." shall refer to Executive Order No. 375.

(h) "MFN" shall mean Most Favored Nation. AEcIaH

(i) "TRM Committee" shall refer to the Committee on Tariff and Related Matters.

(j) "AHTN" — shall mean ASEAN Harmonized Tariff Nomenclature.

RULE II

Scope and Coverage

SECTION 2. These rules and regulations shall apply to all articles listed in Annex A of E.O. 375 subject to the increase of duty from three percent (3%) to seven percent (7%) stipulated therein.

RULE III

Determination of Commercial Operation

SECTION 3. For purposes of determining the start of the implementation of the seven percent (7%) MFN tariff rate on the articles listed in Annex A of the E.O., GSPI's hot mill or cold mill shall be deemed to be "in commercial operation", when their respective production volumes are sustained at least at any of the following levels:

a) Fifty percent (50%) of the BOI-registered capacity for hot mill or cold mill products (as the case may be); or,

b) Fifty percent (50%) of average Philippine importation volume of hot rolled or cold rolled steel products (as the case may be) for five (5) years immediately prior to the start of operations.

Production is deemed sustained when the level at which the average daily production volume for not less than sixty (60) operating days when multiplied by 276 operating days per year is at least at any of the levels specified in (a) and (b) above.

Sustained production shall be determined on the basis of the reports required under Section 4.

The definition of commercial operation under this IRR shall in no way affect GSPI's commercial operation commitment under its BOI Registration Certificate Number 2004-136

SECTION 4. GSPI shall submit the following to the TRM Committee, copy furnished the Board:

(a) Duly notarized written notice, signed by the GSPI President, of commercial operations of either or both the hot mill and cold mill, as the case may be including but not limited to the following data/information:

• Duly notarized true copy of the daily production report for at least sixty (60) operating days to support the claim that it has satisfied any of the conditions set forth in Section 3 of this implementing rules and regulations for the determination of "commercial operation"; and

• AHTN Headings (at the 8 digit level) that cover the hot rolled (coil/plate/sheet), and/or cold rolled (coil/plate/sheet) steel products that is actually produced by GSPI's hot mill and cold mill.

(b) Duly notarized quarterly reports on hot rolling and cold rolling operations, containing value and volume of (1) Slab, hot rolled, cold rolled, Tin Mill Black Plate (TMBP), tinplate and tin importation; (2) production; (3) domestic sales; (4) export sales; (5) raw materials inventory; and (6) finished product inventory, once GSPI has been declared ''in commercial operation".

(c) Quarterly reports will be submitted to the TRM Committee Working Group (TRM-WG) for as long as deemed necessary by the TRM Committee but not longer than one (1) year. Deadline for submission of the reports shall be a month after the end of each quarter.

SECTION 5. A TRM Committee Working Group (TRM-WG) composed of representatives of the Board, NEDA, DOF, TC and BOC shall confirm/validate GSPI's claim on the commercial operation of its hot mill and cold mill.

SECTION 6. Following the notification of GSPI that it is in commercial operation, the TRM-WG shall, at any time, visit the GSPI facilities for purposes of confirming/validating the firm's claims on (a) commercial operation of either or both the hot mill and cold mill; and (b) AHTN Headings (at the 8 digit level) that cover the hot rolled (coil/plate/sheet), and/or cold rolled (coil (plate/sheet) steel products produced by GSPI's hot mill and cold mill.

The TRM-WG-shall submit a formal report of its findings to the TRM Committee not later than fifteen (15) days following the plant visit.

SECTION 7. The TRM Committee will issue a notification to the DOF and the BOC that GSPI is deemed in commercial operation, indicating the AHTN Headings (at the 8 digit level) that cover the hot and/or cold rolled flat steel actually produced by GSPI's hot mill and cold mill.

SECTION 8. The BOC shall issue the necessary order to implement the 7% tariff within fifteen (15) days upon receipt of the TRM Committee notification. CaASIc

SECTION 9. These implementing rules and regulations shall take effect immediately following its publication in a newspaper of general circulation.

Approved 12th day of April 2006, Makati, Philippines.

 

(SGD.) PETER. B. FAVILASecretary

 

(SGD.) MARGARITO B. TEVESSecretary

 

(SGD.) ROMULO L. NERISecretary of Socio-Economic Planning

 

(SGD.) NAPOLEON L. MORALESActing Commissioner

Published in The Manila Times on April 26, 2006.