BOC ready for RCEP implementation

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  • The Bureau of Customs is ready for implementation of the Regional Comprehensive Economic Partnership
  • RCEP entered into force in the Philippines on June 2
  • Customs Memorandum Order No. 12-2023 provides guidelines on the issuance and acceptance of proof of origin, granting of preferential tariff treatment, and verification procedures under the RCEP agreement
  • Forms to be used to avail of preferential treatment under the free trade agreement are now available
  • BOC’s Electronic-to-Mobile System has been modified to reflect the preferential tariff under the agreement

The Bureau of Customs (BOC) is ready for implementation of the Regional Comprehensive Economic Partnership (RCEP), which entered into force in the Philippines on June 2.

BOC has issued Customs Memorandum Order (CMO) No. 12-2023, dated May 26, providing guidelines on the issuance and acceptance of proof of origin, granting of preferential tariff treatment, and verification procedures under the RCEP agreement.

CMO 12-2023, which also takes effect on June 2, implements Chapter 2 (Trade in Goods) and Chapter 3 (Rules of Origin) of the RCEP Agreement.

BOC Port Operations Service officer-in-charge Atty. Clarence Dizon, in a phone interview with PortCalls, said forms to be used to avail of preferential treatment under the free trade agreement (FTA) are now available.

Concerned offices and officers have also been trained while BOC’s Electronic-to-Mobile System has been modified to reflect the preferential tariff under the agreement, Dizon added.

RCEP is an FTA between the 10 member states of Association of Southeast Asian Nations (ASEAN) and its five FTA partners—Australia, China, Japan, New Zealand and Republic of Korea. It was signed on November 15, 2020 after years of negotiation that began in 2012.

The agreement covers a market of 2.2 billion people with a combined size of US$26.2 trillion or 30% of the world’s gross domestic product. The deal will improve market access with tariffs and quotas eliminated in over 65% of goods traded, and will make business predictable with common rules of origin and transparent regulations.

RELATED READ: RCEP and Free Trade Agreements

Executive Order (EO) No. 25 series of 2023 was signed on May 7 operationalizing the Philippines’ tariff commitments under the trade agreement and modifying rates of import duty on certain imported items.

Describing the RCEP as a mega free trade deal, Trade Secretary Alfredo Pascual said the Philippines has secured enhanced market access for key products of interest such as preserved pineapples, durian, chocolate, and ignition wiring sets.

“We see RCEP as a critical key toward inclusive economic growth, not only for the Philippines but within ASEAN [Association of Southeast Asian Nations],” he said.

DTI said RCEP features improved rules and procedures, which is expected to aid businesses in conducting trade in the region. This includes advanced customs procedures to facilitate trade and a single set of rules of origin (ROO) to transact with 14 trading partners.

“We have also secured one big advantage of RCEP—the expanded cumulation area, allowing exporters to source raw materials from 14 countries, and secure preferential market access to a bigger free trade area,” Pascual said.

Under CMO 12-2023, originating goods will be eligible for RCEP preferential tariff treatment at the time of importation, pursuant to EO 25. The applicable RCEP preferential tariff rate will be determined based on the RCEP country of origin of the originating goods.

BOC will only accept the certificate of origin (CO) form RCEP and declaration of origin (DO) issued by an approved exported as proof of origin upon the effectivity of CMO 12-2023.

An approved exporter is an exporter authorized by BOC to complete a DO, which is a declaration on the originating status of a good. A CO, meanwhile, refers to the document issued by the issuing body of an exporting party.

The DO issued by an exporter or producer will only be accepted when the Philippines implements subparagraph 1(c), Article 3.16 (proof of origin) of the RCEP agreement. The back-to-back proof of origin issued by the intermediate party should only be accepted by BOC if it was based on a CO form RCEP or DO issued by an approved exporter.

In cases where the RCEP preferential tariff rate is higher than the applied rate at the time of importation, the importer will be allowed to apply for a refund of any excess duties and taxes paid for the originating goods covered by a proof of origin in accordance with CMO 25-2020 (new guidelines on the refund of duties and taxes and tax credit to stakeholders).

In cases where the importer did not make a claim for preferential tariff treatment under the RCEP agreement at the time of importation, the importer will also be allowed to apply for a refund of any excess duties and taxes paid as the result of a good not having been granted preferential tariff treatment.

BOC’s Export Coordination Division (ECD) or Export Division/Unit will carry out the proper examination of all applications for issuance of CO under the RCEP agreement.

The ECD will also carry out proper examination of all applications for approved exporter status under the agreement and maintain an approved exporter database to monitor Philippine approved exporters relative to their compliance with domestic laws, rules, and regulations pertinent to exportation and the rules of origin.

BOC’s Preferential Rate Unit (PRU) or its equivalent units in all ports, meanwhile, will evaluate the authenticity, accuracy, and validity of proofs of origin submitted by importers and grant RCEP preferential tariff rates accordingly.

When it has reasonable doubt as to the authenticity and validity of the proof of origin or as to the accuracy of the information regarding the origin of goods, the PRU or its equivalent units may request for verification through the ECD.

The ECD will also carry out verifications of the originating status of the good upon request of the RCEP importing party or based on risk analysis criteria. Verifications can be made based on documents requested from the exporter or producer or by inspections at the exporter’s or producer’s premises. – Roumina Pablo