Question & AnswerQ&A (Republic Act No. 8751)
The main purpose is to strengthen the mechanisms for the imposition of countervailing duties on imported subsidized products to protect domestic industries from unfair trade competition.
A countervailing duty is a tariff imposed on imported products that have been subsidized by the government of the country of origin or exportation, intended to counteract the subsidy and protect the domestic industry from material injury or threat thereof.
A countervailing action may be initiated by any person, natural or juridical, who has an interest to protect domestic industry through a verified petition, or by the Secretary of Trade and Industry or the Secretary of Agriculture under special circumstances.
The petition must include the domestic industry affected, data on employment, production, sales and capacity, information on importers, exporters, and subsidies involved, and other relevant facts necessary to justify the duty.
More than 50% of the total production of the like product by the domestic industry must support the petition, and an investigation can only be initiated if supporters constitute at least 25%.
The Secretary reviews the petition's sufficiency within 10 days, notifies the Secretary of Finance, requests the Commissioner of Customs to hold import entries, and notifies interested parties.
The Tariff Commission conducts the formal investigation to determine the existence and amount of subsidy, material injury to the domestic industry, and causal relationship between subsidy and injury.
A subsidy exists when the government or public body provides financial contributions such as direct funds, loan guarantees, foregone revenue, goods or services other than general infrastructure, purchases, payments to funding mechanisms, other financial contributions, or income/price support.
It is determined by examining volume and prices of subsidized imports, effects on domestic producers, relevant economic indicators, and other concurrent factors affecting the domestic industry.
Yes, the countervailing duties can be reviewed after 6 months or motu proprio and terminated if no longer necessary. Duties must be terminated no later than 5 years unless a review shows continued injury and subsidization.
An interested party may file a petition for review to the Court of Tax Appeals within 30 days from receipt of notice, but filing does not suspend the imposition or collection of duties.
The committee is composed of the Secretaries of Trade and Industry, Agriculture, Finance, the Chairman of the Tariff Commission, and the Commissioner of Customs.
If an acceptable voluntary undertaking is offered to revise prices or eliminate/limit subsidies, the Commission may recommend termination or suspension of investigation; such undertaking lapses if there is a negative finding.
The Tariff Commission must complete the formal investigation and submit a report within 120 days from the receipt of the case records.
A provisional cash bond, equal to the provisionally estimated subsidy amount, is collected during investigation to ensure compliance; it is applied to the final duty or refunded if in excess.