Author: Asnia Bayabao

Exporters and manufacturers are urged by the Strategic Trade Management Office (STMO) to conduct risk assessment of their products that may be of dual-use goods, otherwise known as strategic goods.

Dual-use goods are items, software, or technology which can be used for both civil and military end-use. These goods are listed in the National Strategic Goods List (NSGL). Other types of strategic goods are military goods and nationally controlled goods.

Strategic goods is defined by the Strategic Trade Management Act (STMA) as “products that for security reasons or due to international agreements, are considered to be of such military importance that their export is either prohibited altogether or subject to specific conditions”. These products are “generally suitable to be used for military purposes or for the production of WMD (Weapons of Mass Destruction)”.

To determine if the goods are of dual-use, exporters may refer to the NSGL, ask the product manufacturer or request classification from the STMO.

Exporters of dual-use goods are required to register and secure an exporter authorization or license from the STMO. Registration of exporters, as announced by the STMO in a forum, will be in the last quarter of 2019, while the exporter authorization is scheduled to be implemented in the third quarter of 2020.

The STMO, a bureau under the Department of Trade and Industry, is mandated by the STMA to regulate such goods by issuing “authorization/ licenses for the export, import, re-export, transit, transshipment, and provision of related services such as brokering, transporting, financing and providing technical assistance of strategic goods”.

Also covered by the STMA are the transit, transshipment, re-export, import, and reassignment of strategic goods. The schedule of regulating such activities is still to be announced by the STMO.

Non-compliance of the Act by the exporters will risk them seizure, delays, fines, imprisonment and inclusion in the denials list/ watchlist.

The STMA, otherwise known as Republic Act No. 10697, “An Act Preventing the Proliferation of Weapons of Mass Destruction by Managing the Trade in Strategic Goods, the Provision of Related Services, and for Other Purposes,” was enacted to enforce measures to establish domestic controls to prevent the proliferation of weapons of mass destruction (WMD) and their means of delivery from or within the Philippines. (ARB)

Effective this year, exporters of products under the European Union (EU) Generalized System of Preference (GSP) – are required to be registered to the Registered Exporters System (REX).

The system allows exporters to issue self-certifications of the origin of goods  to the EU under the GSP Program.

The REX replaces the current system of origin certification based on certificates of origin issued by the Bureau of Customs (BOC).

However, the rules of determining the origin of good in the EU GSP scheme remain unchanged with the application of the REX System.

The global transition period from the current system of origin certification to the REX system started on 01 January 2017 and will last until 30 June 2020.

There are three (3) easy steps for exporters to register in the REX system: (1) The exporter fills in (electronically/ on paper) an application and submits it to the BOC; (2) If the application is complete, BOC encodes it in the REX system, assign a REX number, a registration date and a validity date; and (3) BOC informs the exporter of the registration or non-registration within seven (7) working days after receipt of the complete set of documents by the Export Control Division (ECD) of the BOC.

The following documents are needed  to be submitted by the exporter to BOC: latest income tax return, Unique Reference Number (URN) for PEZA locators and Client Profile Registration System (CPRS) for non-PEZA locators, business permit, SEC/DTI registration, list of products applied for authorization to make invoice declaration and product evaluation report.

Exporters who are not manufacturers or producers, must have prior knowledge on how the goods were manufactured or produced and that they comply with the origin rules applied under Annex 22-03 in GSP. Finally, registered exporters shall be notified about the results of the application and shall be assigned with a REX number within seven (7) working days after receipt of the complete set of documents by the ECD. (GTM)

1. Signatory/Applicant is not authorized to apply (based on Board Resolution);
2. No Certificate of Employment (COE) and Authorization submitted (for Liaison Officer);
3. Multiple Origin/Destination Encoded/Written on Application Form;
4. Application Form Entries, Permit, Radio Message and Endorsement Letter from PNP Not Matching; and
5. No Proof of Business (for Sole Proprietor)

In a bid to suppress corruption, the Bureau of Customs (BOC) is now in its second phase of pilot testing the implementation of the 1-Assessment System in selected ports in the country.

1-Assessment which is formerly known as Enhanced Goods Declaration Verification System (EGDVS) is a web-based application which will institutionalize the “Zero Contact Policy” in the cargo clearance process. The system will randomly assign Customs examiners and appraisers to goods declaration filed, thus, removing the “suki system”.

As such, examiners, appraisers and brokers can now only communicate through the 1-Assessment portal. Pursuant to Customs Modernization and Tariff Act and other related laws and regulations, Customs Memorandum Order (CMO) 17-2018, which implements the system, provides sanction and penalties to violating parties. .

For transparency, the system also enables importers and brokers to obtain real-time status of their goods declaration lodged with the BOC.

The system will only cover “import consumption entries cleared under the formal entry process in all ports of entry.

Exempted from the 1-Assessment system, even if cleared under the formal entry process, are the (1) Super Green Lane shipments, (2) articles withdrawn from the Customs Bonded Warehouse for local consumption, (3) wastages under the Bonded Warehouse Regime and jet operation losses, (4) goods entered as temporary imports for subsequent re-exportation and (5) deferred payment of government.

To use the system, importers and brokers shall lodge their goods declaration through the Value Added Service Providers, who shall in turn transmit the E2M lodged goods declaration to the 1-Assessment system.

The brokers must then attach the supporting documents to the system. However, original hard copies of supporting documents and notarized copy of the Single Administrative Document (SAD) and Supplemental Declaration on Valuation shall be submitted to the Entry Processing Unit or equivalent office in the port for documents verification.

Another feature of the system is the randomly re-assignment of goods declaration that remained unattended for two hours.

The 1-Assessment system which is the second version of the EGDVS was already implemented at the Port of Manila and Manila International Container Port in October 2017.  Covered in the second-pilot implementation are the ports of Batangas, Clark, Limay, Subic and Surigao and the sub-ports of Bislig, Nasipit, Mariviles, Siain, Puerto Princesa and Bauan. Expected full implementation of the system will either be in December 2018 or in early 2019. (ARB)

The Senate passed on third reading the Senate Bill 1311 or the Ease of Doing Business (EODB) Act of 2017 which seeks to establish a national policy of ease of doing business, creating for the purpose the Ease of Doing Business Commission. The bill was sponsored by Senator Juan Miguel Zubiri, chair of the Senate Committee on Trade, Commerce and Entrepreneurship.

The bill sets a new prescribed processing period under which both national and local government offices will have to process the application and communicate the decision regarding the status of the application. This period will not be longer than three (3) working days for simple transactions and seven (7) working days for complex transactions from the time the application was received. For highly technical applications, the bill prescribes a maximum processing time of thirty (30) working days.

To ensure the attainment of the objective of this Act, an Ease of Doing Business Commission will be created. The Commission shall be the policy-making body on business registration and regulatory management and shall set the overall direction for the implementation of the National Policy on Ease of Doing Business.

Likewise, the House Committee on Trade and Industry recently approved the same version of the aforesaid bill. The House of Representatives is targeting to pass the measure before its Session break on 14 October 2017. The EODB Act is certified as urgent by President Rodrigo Duterte. –Ma. Divine Grace T. Derez