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BOC, DTI, IPAs agree to facilitate trade of strategic goods

  • The Bureau of Customs, Strategic Trade Management Office and several investment promotion agencies signed a memorandum of agreement to facilitate trade of strategic goods
  • Measures eyed to establish authenticity of authorizations issued to persons engaged in strategic trade to expedite clearance and reduce transaction time and costs
  • Agreement seeks to develop procedures in collecting export declaration data and process said data for compliance audits, intelligence building and risk management
  • Strategic goods are products considered to be of such military importance that their export is either subject to specific conditions or prohibited altogether

The Bureau of Customs (BOC), Strategic Trade Management Office (STMO), and several investment promotion agencies (IPAs) signed a memorandum of agreement on December 15 to facilitate the trade of strategic goods.

Due to security reasons or international agreements, strategic goods are products considered to be of such military importance that their export is either subject to specific conditions or prohibited altogether.

The MOA aims to develop measures to establish authenticity of authorizations issued by the STMO–an office under the Department of Trade and Industry (DTI)–to persons engaged in strategic trade in order to expedite clearance and reduce transaction time, costs, and burden associated with such procedures while implementing effective levels of strategic trade controls.

The MOA also aims to develop procedures within trade facilitation departments, export divisions, and equivalent units of agencies involved to monitor and validate authorizations issued by the STMO.

In addition it seeks to craft procedures in collecting export declaration data and process said data for compliance audits, intelligence building, risk management, and other purposes.

A Technical Working Group on Strategic Trade Facilitation was created comprising the contracting parties to establish communication mechanisms and procedures, organize and implement Commodity Identification Training for Frontline and Enforcement Officers, and streamline documentary requirements with BOC and IPAs.

IPAs signatories include the Authority of the Freeport of Area Bataan, Clark Development Corp., Philippine Economic Zone Authority, and Subic Bay Metropolitan Authority.

The partnership aims to establish an effective coordination and cooperation mechanism toward enhanced trade facilitation, optimize information sharing, boost the capability of front liners to identify strategic goods, and reduce the complexity of doing business of legitimate and compliant strategic goods exporters.

Under the MOA, STMO authorization will form part of shipment clearances and requirements of BOC and IPAs, as provided in DTI Memorandum Circular No. 20-47 (Guidelines on Export Clearance).

Authorization refers to a license issued by the STMO to any person who engages or intends to engage in the trade of strategic goods. BOC and IPAs will be responsible for verifying the authenticity of the authorizations submitted.

BOC’s Risk Management Office (RMO) will be the responsible unit to perform centralized risk management and targeting for strategic goods shipments. IPAs, on the other hand, will contribute to information sharing and other efforts in harmonizing the risk management of strategic shipments.

STMO, for its part, should share data and information to RMO on transactions and profiles which will undergo the standard risk management process and should not circumscribe other existing Selectivity Rules established by BOC to determine level of risk.

BOC and IPAs should be responsible for verifying authenticity of authorizations through a Quick Response (QR) Code system and/or call or email to STMO’s designated lines. A reach-back mechanism will be established among the parties to monitor compliance with the Strategic Trade Management Act (STMA).

If an item for export does not meet the minimum technical specifications in the National Strategic Goods List (NSGL) but are visually similar to strategic items, a Non-Strategic Good Certificate (NSGC) will be issued by STMO to requesting parties.

STMO Memorandum Circular No. 20-03 provides guidelines in obtaining NSGC.

BOC and IPAs should ensure all strategic goods have appropriate authorizations from the STMO prior to export.

The STMO should establish capacity building training programs for BOC and IPA personnel aimed at developing familiarity with strategic goods, identifying potentially controlled shipments, and building awareness of scenarios regarding potential STMA violations.

The signing of the MOA “is another proof of government’s willingness to implement its obligations on international security, especially on the prevention of the proliferation of weapons of mass destruction,” said STMO director Luis M. Catibayan.

“DTI also hopes that the effective and efficient implementation of STMA will attract investors on high-value strategic goods and technology, thus contribute to Philippine economic recovery from the effects of the restrictions brought by the pandemic,” he added.

The MOA signing is in consonance with implementation of Republic Act (RA) No. 10697, otherwise known as the STMA, which was signed in 2016 to comply with United Nations Security Council Resolution No. 1540.

The UN resolution “imposes binding obligations on all states to adopt legislation to prevent the proliferation of nuclear, chemical and biological weapons, and their means of delivery, and establish appropriate domestic controls over related materials to prevent their illicit trafficking.”

The law aims to regulate the export, import, transit and transshipment, re-export and reassignment of strategic goods, software and technology and the provision of related services to prevent weapons of mass destruction from proliferating.

STMO serves as the executive and technical agency of the government in establishing the systems for managing the trade of strategic goods pursuant to STMA.

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