Passenger and light commercial vehicles (LCV) imported from 188 developing countries and territories are exempt from provisional safeguard measures imposed by the Philippines
The exempt countries and territories meet the de minimis import volume for the subject vehicles, according to trade Department Administrative Order 21-01
The 188 countries include 26 from East and Southern Africa, 23 from West Africa, five from North Africa, 10 from South Asia, 13 from the Middle East, 23 from Europe and Central Asia, 49 from the Americas, and 39 from East Asia & Pacific
DAO 21-01 takes effect 15 days after its publication or from the date of the issuance of the corresponding Bureau of Customs order, whichever comes earlier
Passenger vehicles and light commercial vehicles (LCV) imported from 188 developing countries and territories are exempt from provisional safeguard measures imposed by the Department of Trade and Industry (DTI), the agency announced.
Through Department Administrative Order (DAO) No. 21-01, DTI is exempting from provisional safeguard measures these imports coming from the developing countries and territories.
DAO No. 21-01, which is dated February 19, 2021, amends Annexes A and B of DAO 20-11. Issued last year, DAO 20-11 imposes provisional safeguard duties on imported passenger vehicles and LCVs to protect the struggling domestic motor vehicle manufacturing industry.
DAO 21-01 exempts these developing countries based on implementing rules and regulations of Republic Act No. 8800, the Safeguard Measures Act, and the World Trade Organization Agreement on Safeguards, which all exclude from safeguard measures imports originating from developing countries with de minimis volumes.
Certain developing countries in Annexes A and B of DAO 20-11 meet the de minimis import volume for the subject vehicles, necessitating the amendment through DAO 21-01, DTI pointed out.
For the import of passenger vehicles, the 188 countries and territories exempted from the temporary safeguard measures include 26 from East and Southern Africa, 23 from West Africa, five from North Africa, 10 from South Asia, 13 from Middle East, 23 from Europe and Central Asia, 49 from the Americas, and 39 from East Asia & Pacific.
The countries include Association of Southeast Asian Nations members Brunei, Cambodia, Laos, Malaysia, Myanmar, Singapore, Vietnam, and other neighbors such as Hong Kong and Macau.
For the import of LCVs, the 188 countries including China and Indonesia are exempt from the safeguard duty.
DAO 21-01 notes that imports from ASEAN member states should still be governed by provisions of the ASEAN Trade in Goods Agreement.
DAO 21-01 takes effect 15 days from its publication or from the date of the issuance of the corresponding Bureau of Customs order, whichever comes earlier.
Provisional safeguard duties were imposed on imported passenger vehicles and LCVs last February 1 and the measure will last for 200 days. This follows the issuance of BOC’s Customs Memorandum Order (CMO) No. 06-2021, which implements DAO 20-11.
Under CMO 06-2021, the provisional safeguard duties will be in the form of a cash bond amounting to P70,000 per unit of any four-wheeled passenger car that is designed to transport less than 10 persons and not primarily to transport goods classified under ASEAN Harmonized Tariff Nomenclature (AHTN) Code 8703.
Imported passenger cars that are completely knocked down (CKD), semi-knocked down (SKD), used, with electric motors, and those designed for a special purpose such as ambulances and hearses are excluded from the coverage of the provisional duty.
Also excluded from the provisional duty are luxury passenger cars that have a free on board (FOB) value of US$25,000 or higher.
A cash bond of P110,000 will also be imposed per unit of imported LCV, whether four-wheeled drive or not, which are designed to carry both passenger and cargo that are classified under AHTN Codes 8704.21.19 and 8704.21.29. Imported LCVs that are CKD, SKD, used, with electric motors, and those designed for a special purpose such as ambulances and hearses are excluded from coverage. Further, LCVs that have an FOB value of $28,000 or higher are also excluded.
Pursuant to the finance secretary’s letter, the provisional safeguard duty to be imposed and collected shall be reckoned from the issuance of CMO 06-2021. It should also not form part of the landed cost that is used as basis for the value-added tax to be paid upon importation.
For the purpose of computing excise tax, the provisional safeguard duty will be deducted from the net importer’s selling price and suggested retail price.
DTI moved to impose the safeguard duties after determining that increased importation of passenger cars and LCVs has caused serious and substantial injury to the domestic motor vehicle manufacturing industry.
The agency undertook the preliminary determination for safeguard measures upon a petition filed by the Philippine Metalworkers Alliance.
DTI’s preliminary determination also found that critical circumstances exist where delay in imposing the measure would cause the industry irreparable damage.
The provisional safeguard measures are in effect while the case is under formal investigation by the Tariff Commission. – Roumina Pablo