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PH is most improved country in strategic goods trade regulation index

  • The Philippines was the most improved country in implementing strategic trade regulations in the 2021/2022 Peddling Peril Index
  • The Philippines’ ranking increased by 273 points to 755 points this year from 482 points in the previous year
  • The country moved up from 86th place in 2020 to 49th place in 2021
  • The Department of Trade and Industry said the Philippines’ strong improvement will boost the country’s image as a secure investment location for the manufacture and export of strategic goods

The Philippines was named the most improved country in implementing strategic trade regulations in the 2021/2022 Peddling Peril Index (PPI), the Department of Trade and Industry (DTI) said in a statement.

The Philippines’ ranking increased by 273 points to 755 points this year from 482 points in the previous year, enabling it to move up from 86th place in 2020 to 49th place in 2021.

The PPI rates 200 nations based on their strategic trade control adoption and implementation, with the goal of assisting countries to strengthen their systems by examining the degree of their implementation and enforcement, as well as tracking their progress over time.

Trade Secretary Ramon Lopez attributed the improvement “to a large extent” to support extended by the Office of the President and the National Security Council – Strategic Trade Management Committee (NSC-STMCom).

Strategic goods are items with civilian and military applications that can be used as materials or parts of weapons of mass destruction (WMDs). Various countries have enacted strategic trade control laws in compliance with their obligation in numerous treaties and international agreements to prevent the proliferation of WMDs.

The Philippines enacted Republic Act No. 10697, also known as the Strategic Trade Management Act (STMA), in 2015.

The STMA complies with the United Nations Security Council Resolution No. 1540, which “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 STMA established the NSC-STMCom as the government’s policy-making body on strategic trade matters. The STMA also created the Strategic Trade Management Office (STMO) under the DTI as the agency mandated to register, issue or deny authorizations; undertake risk assessments; and investigate cross-border trade in strategic goods.

Enterprises engaged in the export, reexport, reassignment, transit, transshipment, and import of strategic goods, as well as related services such as brokering, transporting financing and providing technical assistance, are subject to regulatory requirements of the STMA.

The law is being implemented in phases, with exports as the first covered sector.

RELATED READ: Penalties for strategic trade act violation take effect in 2022

Five super criteria and 105 sub-criteria or indicators make up the PPI. These are international commitment to prevent strategic commodity trafficking; legislation to regulate and oversee strategic commodity trade; ability to monitor and detect strategic trade; ability to prevent proliferation financing; and effectiveness of enforcement against strategic commodity trafficking.

The Philippines achieved more than 50% of the total possible points in four super criteria: 87% (174 out of 200) in legislation; 71% (282 out of 400) in adequacy of enforcement; 65% (129 out of 200) in ability to monitor and detect strategic trade; and 58% (58 out of 100) in international commitment.

While it achieved only 28% in capacity to prevent proliferation financing, this was also the criterion where the country achieved the highest increase in score (113 of 400).

DTI said this improvement can be attributed to STMO’s issuance of guidelines to comply with requirements of the Financial Action Task Force on the Implementation of Financing and Brokering. The Anti-Money Laundering Council also issued targeted financial sanctions related to the proliferation of WMD and proliferation financing, the sanctions becoming effective February 1, 2021.

DTI Undersecretary for the Industry Development and Trade Policy Group Ceferino Rodolfo thanked Congress for passing one of the world’s most comprehensive strategic trade control legislations, as this enabled the country to adopt a whole-of-government approach to ensuring that strategic goods trade is used for legitimate purposes only and not diverted to WMD proliferators.

Rodolfo said “the Philippines’ strong improvement in the PPI ranking is likely to boost the country’s image as a secure investment location for the manufacture and export of strategic goods.”

The PPI is run by the Institute for Science and International Security, a non-profit, non-partisan organization whose main goal is to prevent the spread of nuclear weapons and related technology.

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