JAPAN EXTERNAL TRADE ORGANIZATION
General Legal Update
For the Month of October 2004
I. Trade and Investment Updates
Promulgation of Consolidated Procedures in the
Issuance of Certificate of Origin
The Bureau of Customs (“BOC”) issued Customs Memorandum Order (“CMO”) No. 272004 dated 8 October 2004, which consolidates and simplifies the procedures governing
the issuance of Certificate of Origin (“CO”), for both exports with preferential tariff
treatment and exports without preferential tariff treatment. Under existing regulations,
preferential tariff treatment may be availed of under the Generalized System of Preference
(“GSP”), Association of Southeast Asian Nations (“ASEAN”) – Common Effective
Preferential Tariff (“CEPT”), and ASEAN – China Free Trade Area (“ACFTA”), which
are schemes whereby reduced or total elimination of tariff is granted to certain eligible
products exported by the Philippines.
The CO is issued upon determination and verification by the proper office of the BOC that
the products for export originate from the Philippines in accordance with the respective
origin requirements of the GSP, ASEAN-CEPT, and ACFTA schemes. In cases where the
exporter does not qualify under any of said schemes, he may also request for the issuance
of a CO, upon compliance with the prescribed requirements.
To prevent the use of spurious COs for exports under the ASEAN-CEPT and ACFTA
schemes, CMO No. 27-2004 also provides for retroactive verification of exports under
said schemes. The verification may be conducted at random or when a reasonable doubt
exists as to the authenticity of the CO or the accuracy of the information indicated therein
regarding the true origin of the products, following the procedures prescribed under CMO
No. 27-2004.
CMO No. 27-2004 expressly repealed the Notice to Exporters dated 12 February 2002.
II. Miscellaneous New Issuances
Procedural Manual for
Hazardous Waste Management Issued
Consistent with the continuing effort of the Department of Environment and Natural
Resources (“DENR”) to strengthen the implementation of Republic Act (“RA”) No. 6969,
otherwise known as the “Toxic Substances and Hazardous and Nuclear Wastes Control
Act of 1990”, the DENR revised Title III of the Implementing Rules and Regulations
(“IRR”) of RA No. 6969, embodied in DENR Administrative Order No. 29, Series of
1992. Title III of the IRR covers control and management of hazardous and nuclear
wastes.
The revisions are contained in the Procedural Manual developed by the DENR for
hazardous waste management and issued through DENR Administrative Order No. 200436. The sections of Title III of the IRR that were revised include: (1) Classification of
Hazardous Wastes; (2) Waste Generators; (3) Waste Transporters; (4) Waste Transport
Record; (5) Hazardous Waste Storage and Labeling; (6) Waste Treatment and Disposal
Premises; (7) Import and Export of Hazardous Substances; (8) Prescribed Fees for
Hazardous and Nuclear Wastes; and (9) Administrative Violations and Fines.
DENR Administrative Order No. 2004-36 took effect on 9 October 2004.
Release of the Implementing Guidelines for Availing
Tax Incentives Under the Clean Air Act
The DENR released on 31 August 2004 the guidelines to implement the tax incentives
provision under Section 13 of RA No. 8749, otherwise known as the “Philippine Clean Air
Act of 1999”. The implementing guidelines, as contained in DENR Administrative Order
No. 2004-53, apply to industries which shall install pollution control devices or retrofit
their existing facilities with mechanisms that reduce pollution in compliance with the air
quality standards set forth in RA No. 8749 and its IRR.
The following are the tax incentives provided under RA No. 8749: (1) accelerated
depreciation deductible from gross income under Section 34(F) of the Tax Code; (2)
deductibility from gross income of research and development expenditures under Section
34(I) of the Tax Code; (3) crediting of input taxes on purchases or importations of
pollution control devices, supplies, and materials under Section 110 of the Tax Code; (4)
exemption from real property taxes of machinery and equipment used for pollution control
and environmental protection under Section 234(e) of the Local Government Code; and
(5) applicable tax incentives for qualified enterprises operating within special economic
and freeport zones.
To avail of any of the foregoing tax incentives, the applicant is required to secure a Permit
to Operate from the Environmental Management Bureau (“EMB”) of the DENR in
accordance with its existing procedures and requirements. The Permit to Operate shall
serve as proof of eligibility of the applicant and must be submitted to the Bureau of
Internal Revenue and/or local government unit concerned to avail of tax incentives under
RA No. 8749.
New Compliance Regulation for Water Pollution Control
The DENR implements a new regulation for water pollution control applicable to all
establishments having water pollution source and/or water pollution control facilities.
Under DENR Administrative Order No. 2004-25 dated 25 August 2004, the DENR
prescribes the conversion of the Permit to Operate requirement to Discharge Permit. All
owners or operators of facilities that discharge regulated effluents are now required to
apply with the DENR-EMB for Discharge Permit in lieu of Permit to Operate, in
accordance with the procedure and requirements prescribed under DENR Administrative
Order No. 2004-25.
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A Discharge Permit duly issued by the DENR-EMB shall have a validity of five years,
unless sooner suspended or revoked. It may be suspended or revoked, after due notice and
hearing, for any of the grounds provided under DENR Administrative Order No. 2004-25.
In case of disapproval of application for or suspension or revocation of duly issued
Discharge Permit, the owner or operator of the facilities shall not be authorized to
discharge its wastewater into the environment.
Removal of Authority to Construct Requirement for
Air and Water Pollution Source Facilities
The DENR has relaxed the regulation of construction/installation of new/modified air or
water pollution source facilities by removing the Authority to Construct requirement,
prescribed under the IRR of Presidential Decree No. 984, entitled “Providing for the
Revision of Republic Act No. 3931, Commonly Known as the Pollution Control Law, and
For Other Purposes”, and DENR Administrative Order No. 2000-81. The Authority to
Construct was previously required as a pre-requisite to the construction/installation of
source facilities to ensure their compliance with the environmental requirements and
standards of the DENR.
The removal of the Authority to Construct requirement is implemented through DENR
Administrative Order No. 2004-25, for water pollution source, and DENR Administrative
Order No. 2004-26, for air pollution source. DENR Administrative Order Nos. 2004-25
and 2004-26, both dated 25 August 2004, took effect on 11 September 2004.
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