2024 Tariff Laws Review Day 1 PDF

CLAP CUSTOMS REVIEW & CENTER FOR PROFESSIONAL DEVELOPMENT, INC. in coordination with PEDREZA CUSTOMS AND TARIFF WEBINARS Room 209,...

CLAP CUSTOMS REVIEW & CENTER FOR PROFESSIONAL DEVELOPMENT, INC. in coordination with PEDREZA CUSTOMS AND TARIFF WEBINARS Room 209, 2nd Floor, Manuel F. Tiaoqui Bldg., Plaza Sta. Cruz, Manila Contacts - Globe: 09063811016 / 09068172757 Email: [email protected] FB: www.facebook.com/clap.stacruz/ 2024 TARIFF LAWS REVIEW – DAY 1 TARIFF COMMISSION (FUNCTIONS AND MANDATES) & CMTA SECTION 1100 (ADVANCE RULING and CLASSIFICATION DISPUTES) ENG’R RAMON G. LUCERO, JR. TARIFF COMMISION ORGANIZATIONAL STRUCTURE Per E.O. 366, s. 2008 THE PHILIPPINE TARIFF As Amended by R.A.10863 COMMISSION (Customs Modernization and Tariff Act), s. 2016 The principal authority on OFFICE OF THE CHAIRPERSON AND COMMISSIONERS tariffs and trade remedy measures Research, Investigation and Administered by a collegial Finance Management and International Trade Analysis Administrative Service (FMAS) body composed of a Service (RIITAS) Chairman and two Member Commissioners Financial Management Economics, Trade and An attached agency of the Division (FMD) Industry Studies Division National Economic and (ETISD) Development Authority International Trade Studies Administrative Division (ITSD) (NEDA) Division (AD) Commodities Studies Planning Management and Division (CSD) Information Systems Division Financial Studies Division (PMISD) (FSD) TARIFF COMMISSION FUNCTIONS (CMTA Section 1603) (a) Adjudicate cases on the application of trade remedies against imports pursuant to Sections 711, 712 and 713 ; (b) Study the impact of tariff policies and programs on national competitiveness and consumer welfare (c) Administer the Philippine tariff schedules and tariff nomenclatures; (d) Issue advance rulings on tariff classification of imported goods and render rulings on disputes over tariff classification of goods (e) Provide the President and Congress with independent analysis, information and technical support on matters related to tariff and nontariff measures affecting Philippine industries and exports for policy guidance; (f) (Analyze the nature and composition, and the classification of goods according to tariff commodity classification and heading number for customs and other related purposes, which information shall be furnished the NEDA, DTI, DA, DOF, DENR, and BSP; (g) Review the trade agreements for negotiation and trade agreements entered into by the Philippines and make recommendations, (h) Conduct public consultations and public hearings pursuant to its functions; and (i) Deputize or delegate, to appropriate government agency its function of rendering rulings on disputes over tariff classification of goods, TARIFF COMMISSION MANDATES (CMTA SECTIONS) 711 ANTIDUMPING 1608 FLEXIBLE CLAUSE 712 SAFEGUARD 1609 PROMOTION OF FOREIGN TRADE 713 COUNTERVAILING AND SUBSIDY 1611 TARIFF NOMENCLATURE AND 1100 CLASSIFICATION RULING 1612 RATES OF DUTY 1103 CONDITIONS FOR APPLICATION OF ADVANCE RULING Trade Remedy Measures Unfair trade practices: Fairly traded goods: - Section 711 Antidumping - Section 712 Safeguard Measure Export price lower than the normal value Competition against increased importation - Section 713 Countervailing and Subsidy - General safeguard measure Bounty or subsidy given to exporters Industrial/agricultural goods (except tariffied goods) Tariff Classification Ruling (Sections 1100 and 1103) Advance Ruling ❖ An official written decision issued by the Tariff Commission which provides the appropriate tariff classification under the AHTN prior to an importation or exportation. Conditions: 1. one product per application; and 2. importation is after 90 days ENG’R RAMON G. LUCERO, JR. Page 1 of 6  CLAP CUSTOMS REVIEW & CENTER FOR PROFESSIONAL DEVELOPMENT, INC. in coordination with PEDREZA CUSTOMS AND TARIFF WEBINARS Room 209, 2nd Floor, Manuel F. Tiaoqui Bldg., Plaza Sta. Cruz, Manila Contacts - Globe: 09063811016 / 09068172757 Email: [email protected] FB: www.facebook.com/clap.stacruz/ Dispute Ruling ❖ The ruling issued on cases endorsed to the Commission on the declared classification goods disputed by the importer, exporter, or the Bureau of Customs. Binding with the Bureau of Customs unless overruled by the Secretary of Finance Section 1608 Flexible Clause The President, upon recommendation of the NEDA is empowered to: (1) INCREASE (not more than 100% ad valorem) / REDUCE / REMOVE existing rates of import duty (including Change in CLASSIFICATION); (2) Establish IMPORT QUOTA or to BAN imports of any commodity; (3) Impose an ADDITIONAL DUTY on ALL Imports Not Exceeding 10% ad val. whenever necessary. WHEN CONGRESS IS NOT IN SESSION FLEXIBLE CLAUSE Company petitions (e.g. Jhooks ; 39.26) Government initiated ( BOI - MVDP) Tariff reform programs ( TRP 1) Congressional action ( Jewelry Act) Section 1609 Promotion of Foreign Trade For the purpose of expanding foreign markets for Philippine products as a means of assisting in the economic development of the country, in (a) overcoming domestic unemployment, (b) increasing the purchasing power of the Philippine peso, and (c ) establishing and maintaining better relations between the Philippines and other countries, the President, shall from time to time Enter into trade agreements with foreign governments or instrumentalities thereof Modify import duties, including any necessary change in classification and other import restrictions as are required or appropriate. CASES FALLING IN SECTION 1609: 1. World Trade Organization (WTO) 8. ASEAN Australia New Zealand Free Trade Area 2. Asia Pacific Economic Cooperation (APEC) (AANZFTA) 3. ASEAN Free Trade Area (AFTA) 9. ASEAN Japan Comprehensive Economic Partnership 4. Philippine Japan Economic Partnership Agreement Agreement (AJCEPA) (PJEPA) 10. Philippine European Free Trade Association Free Trade 5. ASEAN China Free Trade Area (ACFTA) Agreement (PH-EFTA FTA) 6. ASEAN Korea Free Trade Area (AKFTA) 11. ASEAN Hongkong Free Trade Area (AHKFTA) 7. ASEAN India Free Trade Area (AIFTA) 12. Regional Comprehensive Economic Partnership (RCEP) Sections 1611 and 1612 - Tariff Nomenclature and Rates of Duty - updates the product nomenclature and coding system to the latest HS and AHTN amendments reflecting the corresponding MFN and ATIGA rates of import duty for the concessions applicable to the other ASEAN Member States. - provides references to Special Laws affecting tariff rates (e.g., Jewelry Industry Development Act & the Motor Vehicle Development Program) - updates nomenclature and rates of duty on export products TARIFF COMMISSION PUBLICATIONS ❖ THE ASEAN HARMONIZED TARIFF NOMENCLATURE ❖ AHTN CORRELATION TABLE ❖ PRIMER ON TARIFF DEVELOPMENT CONTAINING THE AHTN SUPPLEMENTARY EXPLANATORY NOTES (SEN) ❖ COMPENDIUM OF CLASSIFICATION OPINION Section 1100 CMTA I. An importer or exporter may file a written application for an advance ruling on the tariff classification of goods with the Commission. The Commission shall render a ruling within thirty (30) days from receipt of a properly documented application. II. When a declared tariff classification of goods, not subject of a pending application for advance ruling, is in dispute, the importer, exporter, or the Bureau shall submit the matter to the Commission for a ruling. Rulings of the Commission on commodity classification shall be binding upon the Bureau, unless the Secretary of Finance shall rule otherwise. ENG’R RAMON G. LUCERO, JR. Page 2 of 6  CLAP CUSTOMS REVIEW & CENTER FOR PROFESSIONAL DEVELOPMENT, INC. in coordination with PEDREZA CUSTOMS AND TARIFF WEBINARS Room 209, 2nd Floor, Manuel F. Tiaoqui Bldg., Plaza Sta. Cruz, Manila Contacts - Globe: 09063811016 / 09068172757 Email: [email protected] FB: www.facebook.com/clap.stacruz/ TARIFF CLASSIFICATION RULING An official written decision issued by the Tariff Commission, which provides the appropriate tariff classification of goods under the AHTN of the CMTA Tariff Classification the process of determining the correct tariff code for imported and exported goods. It has an impact on customs duties, excise taxes, import VAT, origin management, preferential duties and import and export restrictions as well as in tariff modifications. Importance of correct tariff classification - Facilitate clearance and release of goods - Avoid seizure of goods - Payment of correct customs duty - Avoid criminal liability - Avoid imposition of penalties Tariff Classification Ruling Section 1100 CMTA I. An importer or exporter may file a written application for an advance ruling on the tariff classification of goods with the Commission. The Commission shall render a ruling within thirty (30) days from receipt of a properly documented application. Implementing rules and regulation: Tariff commission order no 2017-01 Tariff Commission classification ruling contains the: Product description MFN and FTA rates of duty (if required); and Basis of classification Validity HS and the AHTN codes Section 1611 tariff nomenclature and rates of duty Rates of Duty (%) ASEAN Member Hdg AHTN Code Description States No. 2017 MFN ATIGA Enjoying Concession (1) (2) (3) (4) (5) (6) Undernatured ethyl alcohol of an alcoholic strength 22.07 by volume of 80% vol. or higher; ethyl alcohol and other spirits, denatured , of any strength. - Undenatured ethyl alcohol of an alcoholic Except MY 2207.10.00 10 0 strength by volume of 80% vol. or higher and BN - Ethyl alcohol and other spirits, denatured , of any 2207.20 strength - - Denatured ethyl alcohol. Including methylated spirits : - - - Ethyl alcohol an alcoholic strength by volume 2207.20.11 10/a 0 Except MY exceeding 99 % vol.: 2207.20.19 - - - Other 10 0 Except MY 2207.20.90 - - Other 10 0 Except MY /a 1% in fuel ethanol program with DOE certificate I. Advance ruling Objectives: ▪ To provide tariff classification ruling of goods at least 90 days prior to importation or exportation ▪ To add certainty and predictability to international trade ▪ To help importers and exporters make informed decisions based on legally binding rules ▪ To enable the establishment of an advance ruling system in line with RKC, WTO and ATIGA ENG’R RAMON G. LUCERO, JR. Page 3 of 6  CLAP CUSTOMS REVIEW & CENTER FOR PROFESSIONAL DEVELOPMENT, INC. in coordination with PEDREZA CUSTOMS AND TARIFF WEBINARS Room 209, 2nd Floor, Manuel F. Tiaoqui Bldg., Plaza Sta. Cruz, Manila Contacts - Globe: 09063811016 / 09068172757 Email: [email protected] FB: www.facebook.com/clap.stacruz/ Application: Submit duly accomplished TC form1 (3 copies) Technical information sheets Authorization of authorized representative Photos Sample Certificate of analysis Brochure Rejection of application - Not in the prescribed form - Determination is not possible based on the presented information and documents - Covers multiple goods - Filed less than 90 days prior to importation or exportation - Non-payment of filing fee Non-issuance of ruling: failure to provide additional info, or did not allow on-site verification involved in litigation or subject of an appeal misrepresentation NOTE: The Commission shall promptly notify the applicant in writing setting out the reasons therefor, and without prejudice to the filing of new application. Withdrawal of application: the applicant may withdraw, in writing, its application at anytime prior to the issuance of the advance ruling Issuance Within 30 days from receipt of application Original copies to the applicant , BOC and DOF If adverse to the government, BOC to elevate within 5 day to DOF who will review within 15 days. If no ruling is issued, the TC ruling is deemed confirmed. Validity 5 years from date of issuance unless earlier revoked (discovery of false or misleading info) or modified (error, change in decision or change in policy) ADVANCE RULINGS ON COMMODITY CLASSIFICATION BUREAU OF CUSTOMS DEPARTMENT APPLICANT (with attachments) OF FINANCE Flow chart CUSTOMS TARIFF REVIEW COMMITTEE outside TC COMMISSIONER OF CUSTOMS FOR ISSUANCE OF CUSTOMS MEMORANDUM ORDER ENG’R RAMON G. LUCERO, JR. Page 4 of 6  CLAP CUSTOMS REVIEW & CENTER FOR PROFESSIONAL DEVELOPMENT, INC. in coordination with PEDREZA CUSTOMS AND TARIFF WEBINARS Room 209, 2nd Floor, Manuel F. Tiaoqui Bldg., Plaza Sta. Cruz, Manila Contacts - Globe: 09063811016 / 09068172757 Email: [email protected] FB: www.facebook.com/clap.stacruz/ Motion for reconsideration ▪ Within 10 days after receipt of ruling ▪ Based on mistakes of facts, excusable negligence, and newly discovered evidence and information ▪ TC to resolve in 10 days ▪ Only 1 MR is allowed Appeal: Filed before the CTA Within 30 days after receipt of TC denial of MR or of the DOF decision on cases elevated by BOC Motion for reconsideration Within 10 days after receipt of ruling Based on mistakes of facts, excusable negligence, and newly discovered evidence and information TC to resolve in 10 days Only 1 MR is allowed Appeal: Filed before the CTA Within 30 days after receipt of TC denial of MR or of the DOF decision on cases elevated by BOC Publication and confidentiality: TC to publish its advance rulings in its website and deposit copies in the record section All information provided for the purpose of advance ruling application shall be treated as confidential Tariff Classification Ruling - Section 1100 CMTA II. The importer, exporter, or the Bureau shall submit the matter to the Commission for a ruling, when a declared tariff classification of goods, not subject of a pending application for advance ruling, is in dispute. Implementing rules and regulation: Tariff Commission Order no. 2018-01 II. CLASSIFICATION DISPUTE Initiation - Endorsement from the BOC in case of difficult and highly technical questions on tariff classification - filing of case by the importer or exporter when the BOC has different classification. Filing fees -The importer or exporter upon filing of the case shall pay the filing fee, legal research fee and other fees as maybe prescribed by TC. -Failure to pay shall cause non-acceptance of the case Documentary requirements: - BOC endorsement letter or assessment reflecting the tariff classification - Duly accomplished TC form 2 (for exporter or importer only) - Samples, brochures, technical information and photos, as may be appropriate - BOC SAD - Affidavit that the product is not a subject of pending application for advance ruling Evaluation of cases endorsed by BOC -within 7 days from receipt, TC to notify the importer or exporter to submit information and allow onsite verification visit within 10 days Evaluation of cases filed by an exporter or importer - within 7 days importer or exporter to submit information and allow on site verification within 10 days from receipt of notice - Within 5 days TC will notify the BOC and request comments - Within 10 days BOC to submit comments and explanations/documents to justify its findings- ENG’R RAMON G. LUCERO, JR. Page 5 of 6  CLAP CUSTOMS REVIEW & CENTER FOR PROFESSIONAL DEVELOPMENT, INC. in coordination with PEDREZA CUSTOMS AND TARIFF WEBINARS Room 209, 2nd Floor, Manuel F. Tiaoqui Bldg., Plaza Sta. Cruz, Manila Contacts - Globe: 09063811016 / 09068172757 Email: [email protected] FB: www.facebook.com/clap.stacruz/ Conduct of public hearing - if deemed necessary, TC shall conduct a hearing which shall be summary and fact finding in nature - TC to notify the parties concerned on the schedule of the hearing - shall be presided by a hearing officer designated by the Commission Issuance of Tariff Classification Dispute Ruling - within 20 days from receipt of information or the documents or termination of the hearing. - maybe extended for another 20 days depending on the complexity of the case. Grounds for dismissal - When exporter or importer failed to provide information on time - did not allow for on-site verification - misrepresentation - Non-compliance to rules and order of the commission Motion for reconsideration The importer or exporter may file MR within 15 days from receipt of ruling based on mistakes of facts and excusable negligence or newly discovered evidences Appeal - Within 15 days after receipt of the order denying the MR - the importer or exporter to file before the Secretary of Finance Finality of the ruling - The Commission ruling is final and executory - unless an MR or appeal is made in the prescribed manner and period. Publication The TC shall publish its rulings on its website and deposit copies in its records section Confidentiality - Confidentiality of all information shall be respected. - no confidential information shall be disclosed unless ordered by a court or upon waiver or consent from the party. ENG’R RAMON G. LUCERO, JR. Page 6 of 6