Question & AnswerQ&A (EXECUTIVE ORDER NO. 333)
The main purpose of Executive Order No. 333 is to modify the rates of duty on certain imported articles under the Tariff and Customs Code of 1978 to implement a minimum 50% Margin of Preference (MOP) on certain products included in the Brand-to-Brand Complementation Scheme in the Automotive Industry under the Basic Agreement on ASEAN Industrial Complementation.
The provisions are based on the Basic Agreement on ASEAN Industrial Complementation (BAAIC) signed in 1981, and the Memorandum of Understanding (MOU) on the Brand-to-Brand Complementation (BBC) Scheme in the Automotive Industry signed by ASEAN Economic Ministers in 1988.
The Toyota Motor Corporation's BBC Scheme is the one mentioned.
The Margin of Preference (MOP) is a preferential tariff margin, specifically a minimum 50% reduction in duty rates granted on certain approved BBC products to promote industrial complementation among ASEAN countries.
The 50% MOP applies to specific automotive parts such as link assembly, steering gear, radiator, panel dash lower, transmission parts, and engine parts imported under the BBC Scheme, as listed in Annex 'A' of the Order.
Yes, the MOP on specific automotive parts like radiator and panel dash lower is exclusively granted to BBC entities in Malaysia and Thailand for a fixed period, subject to extension depending on reciprocity by other ASEAN countries.
For radiator and panel dash lower parts, the exclusivity period is from October 15, 1992, to October 14, 1996, which can be extended up to October 13, 2000, if other ASEAN countries do not grant the MOP within eight years.
After the exclusivity period, the same MOP may be granted to non-participating ASEAN countries if they extend the same privilege. If they refuse and maintain that position, the exclusivity may be extended up to the maximum waiver period of eight years.
The 50% MOP provided under the Executive Order remains effective regardless of any changes in the basic Philippine rate of duty on the enumerated articles.
Imported automotive parts must comply with the Rules of Origin prescribed in the Agreement on ASEAN Preferential Trading Arrangements, as amended, to qualify for the BBC preferential tariff.
DTI is tasked to endorse any revision of part numbers appearing in Annex 'A' to the Bureau of Customs within five days after receiving official copy of the revisions from the ASEAN Secretariat for implementation.
The Executive Order took effect immediately upon its signing on May 16, 1996.