Transporting strategic goods in PH to require DTI registration, license


Traders, transport companies, and logistics service providers moving strategic goods in the Philippines will soon need to be registered and licensed with the Department of Trade and Industry’s (DTI) Strategic Trade Management Office (STMO).

This is mandated under the Strategic Trade Management Act (STMA), or Republic Act (R.A.) No. 10697, (“An Act Preventing the Proliferation of Weapons of Mass Destruction (WMD) by Managing the Trade in Strategic Goods, the Provision of Related Service, and for Other Purposes”).

The law was signed last year to comply with the United Nations Security Council Resolution 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.”

Lorenz Anthony Fernando, STMO trade-industry development specialist, in a presentation during a recent forum on government accreditation for logistics providers, explained that some goods manufactured and used by legitimate businesses can be used to develop WMD or war systems.

Fernando said R.A. 10697 aims to know where sensitive goods and technology are going and to provide a secure trade environment for them.

He also noted that many multinational companies may already be familiar with the strategic goods program because they may be importing from countries already implementing the program.

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

These goods will be listed in the upcoming National Strategic Goods List (NSGL), and to be allowed transport, will require authorization from the STMO, the implementing agency of R.A. 10697.

Aside from tangible items, STMA also covers software technology that can be used to produce and develop WMD and war systems.

The NSGL is composed of three annexes and these are the Military List, Dual-Use List, and Nationally Controlled List.

The Military List includes items, software, and technology that are specifically designed, developed, configured, adapted, or modified for military end-use.

Dual-use goods, on the other hand, are items, software and technology which can be used for both civil and military end-use, or be used to develop, produce, handle, operate, maintain, store, detect, identify, or disseminate WMD or their means of delivery.

An example of a dual-use item is triethanolamine, a substance generally used in shampoos and other cosmetics products that may also be harnessed to make mustard gas. Others include capacitors for use in X-ray machines, which can also be used in storing the energy to be discharged by the switching device of the detonator for nuclear weapons; and accelerometers, which are applied to gadgets such as cell phones and laptops but which can also be used in the guidance system of missiles.

Fernando noted that not all types or conditions of a specific item or machine are covered by the STMA nor will they need authorization.

Nationally controlled goods, meanwhile, are goods placed under unilateral control for reasons of national security, foreign policy, anti-terrorism, crime control, and public safety. There is no list for this yet, Fernando noted.

STMA also has a catch-all provision, meaning that if a certain good that is not on the NSGL satisfies certain requirements, it is still required to get authorization.

The STMA’s scope includes any natural or juridical person who engages or intends to engage in the activities covered, and all Filipinos providing the activities covered, wherever located.

The law covers the export, import, transit, transshipment, re-export, and re-assignment of covered items. It also covers related services such as brokering, financing, and transporting strategic goods between two foreign countries, as well as providing technical assistance.

Once STMA’s implementing rules and regulations (IRR) are released, Fernando said the law will be implemented in phases so as not to burden stakeholders. Under the plan, there will be six phases: registration, export, import, transit/transshipment, re-export/re-assignment, and related services.

Fernando said the target is to finalize and publish the IRR by the end of August.

Importers, exporters, and service providers such as brokers, freight forwarders, truckers, shipping lines, and airlines will have to register with the STMO, which will determine if the items are strategic goods that the industry stakeholder must apply authorization for.

There are three types of authorization: individual, global, and general.

An individual authorization is given to one natural/juridical person with respect to one end-user covering one or more strategic goods. This authorization is valid for two years.

A global authorization is given to a natural/juridical person with respect to one or more end-users/exported to/originating from one or more countries and covering one or more strategic goods. This is valid for five years.

A general authorization, meanwhile, can be used by any natural/juridical person covering low-risk strategic goods destined to one or more low-risk countries subject to conditions specified in the authorization. This type of authorization is for a lifetime until revoked or amended.

Violation of STMA will result in administrative or criminal penalties.

After the IRR is released, the next steps include finalizing the NSGL; submitting and endorsing the proposed organizational structure of the STMO; and establishing an IT infrastructure for implementing the law.

Fernando assured that they are coordinating with other regulatory agencies to ensure that they will not be requiring “too much information.”

He noted that while there may be some overlaps, they are trying to come up with an arrangement with other regulatory agencies to avoid double licensing. – Roumina Pablo

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