The guidelines follow President Rodrigo Duterte’s signing last month of Executive Order (EO) No. 61 series of 2018, which modifies the rates of import duty on certain imported articles to implement Philippine tariff commitments under the PH-EFTA FTA.
Customs Memorandum Order (CMO) No. 14-2018 was signed by Customs Commissioner Isidro Lapeña on September 17 and took effect immediately.
The PH-EFTA FTA was signed in 2016, ratified by Duterte in December 2017, and concurred in by the Senate in March 2018.
EFTA member states consist of Iceland, Liechtenstein, Norway, and Switzerland.
Under the FTA, EFTA will abolish all customs duties on imports of industrial products, including fish and other marine products, originating from the Philippines. The Philippines will do the same for identical type of shipments originating from an EFTA state.
Under CMO 14-2018, exporters to EFTA are allowed to make an origin declaration as proof of origin, which is needed to claim tariff preference.
Origin declaration is defined as the proof of origin required under the PH-EFTA FTA in the form of a declaration sufficient to ascertain the originating status of goods. The declaration must be completed on an invoice, a packing list, a delivery note, or any relevant commercial document that identifies the exporter and the originating goods.
Representatives of an exporter will be allowed to make an origin declaration after submitting the exporter’s written authorization.
Importers sourcing from EFTA states will be allowed to claim preferential tariff treatment for originating goods on the basis of the origin declaration.
An approved exporter is not required to sign the origin declaration, but must instead indicate the customs authorization number (CAN) to be provided by BOC’s Export Coordination Division (ECD).
An approved exporter is a producer, manufacturer, or trader authorized by BOC to complete the origin declaration without signature after complying with the requirements under CMO 14-2018.
A non-approved exporter, on the other hand, must affix his or her signature above the printed name and leave the filed-on “customs authorization number” blank.
The place and date when the origin declaration was completed may be omitted if already contained in the document where such declaration was printed.
The CAN for approved exporters must be submitted to the EFTA Secretariat.
Producers, manufacturers, or traders may submit in writing or electronically to the Assessment and Operations Coordinating Group deputy commissioner, through the ECD, their intention to be accredited as an approved exporter, together with the required documents.
Those applying as approved exporters who are not manufacturers or producers must know how the goods were manufactured or produced and how these goods satisfy the rules of origin or ROO requirements to make an origin declaration under the FTA.
Exporters will be notified about the results of the evaluation. Approved exporters will be assigned with a CAN within seven working days of receipt of the complete set of documents by ECD.
CMO 14-2018 notes that exporters may opt not to apply with BOC as an approved exporter. However, the origin declaration must indicate the complete name and bear the original signature of its authorized signatory. The CMO adds that a non-approved exporter may have a higher risk of retro-verification compared to an approved exporter.
For import shipments availing of preferential tariff treatment under the PH-EFTA FTA, CMO 14-2018 declares that existing customs import procedures will still apply, except that the import documents must be accompanied by an origin declaration and presented prior to release of goods. If the importer does not possess an origin declaration at the time of importation, the importer may present it later, subject to the rules on tentative release.
An origin declaration must be submitted to BOC within 12 months of its completion.
CMO 14-2018 states that BOC will verify origin declarations upon the request of customs authorities of importing EFTA parties. Relatedly, importers and exporters benefitting from the FTA “must cooperate with BOC.” The order also stipulates several obligations of importers and exporters, which include notifying BOC if they become aware, or have reason to believe, that an origin declaration contains incorrect information.
Meanwhile, importers will not be allowed to avail of preferential tariff rates if proven to have committed fraud when complying with CMO 14-2018. Exporters, if proven to have committed fraud in declaring the originating status of goods, will have their status as approved exporter suspended. – Roumina Pablo