Question & AnswerQ&A (Republic Act No. 426)
The primary purpose of Republic Act No. 426 is to regulate imports into the Philippines and establish a system for import quotas, allocation, and licensing for controlled goods to protect local industries, conserve foreign exchange, and promote domestic production.
'Import quota' refers to the total value of any item of import allowed for entry into the Philippines for any specified period as defined in RA No. 426.
The Import Control Board is composed of three members appointed by the President of the Philippines with the consent of the Commission on Appointments, serving for two years. One member represents the Central Bank, one represents businessmen, and one represents consumers.
The Import Control Board establishes policies for import quotas, promulgates rules and regulations for enforcement, supervises the Import Control Administration, reviews appeals from the Commissioner, and is responsible for carrying out the Act's provisions.
A new importer must be a Filipino citizen or a juridical entity with at least 60% Filipino ownership, have the financial capacity and business standing, be duly licensed to engage in business or industry, and have an established place of business or be a cooperative association under the National Cooperative Act.
Violations are punishable by a fine of not less than five thousand pesos and not more than fifty thousand pesos, or imprisonment of two to five years, or both. Aliens may be fined and immediately deported. Officials who violate the law may be summarily dismissed and criminally prosecuted.
No, quota allocations and licenses are non-transferable. It is illegal to cede, transfer, sell, rent, lease, or donate them directly or indirectly, with violations resulting in forfeiture of allocations or licenses and penal sanctions.
Import Control Board members, the Commissioner, and officers of the Central Bank and Import Control Administration must not have any pecuniary interests in import businesses and must not engage in importation of controlled goods.
Imports are classified as prime, essential, non-essential, and luxury, with quota reductions ranging from not more than 40% for prime to 80-90% for luxury imports to conserve foreign exchange and promote local production.
An importer must file an application for quota allocation and import license with the Import Control Administration, supplying required information (such as previous import history or financial capacity), and the Commissioner must approve the application within 60 days to issue the license.