Title
Amend EO 486 on Tariff Reduction for Petrochemicals
Law
Executive Order No. 704
Decision Date
Jan 22, 2008
Gloria Macapagal-Arroyo amends the tariff reduction schedule for petrochemicals and certain plastic products, allowing for the reversion of CEPT rates to previous levels upon the commercial operation of any technology used for domestic production of key monomers.

Amendment of Section 4 of Executive Order No. 486\n- The law amends Section 4 of Executive Order No. 486 issued on January 12, 2006.\n- The amendment expands the condition under which the tariff reduction schedule under the CEPT scheme can revert to previous tariff rates.\n\n### Scope of Tariff Reversion for Petrochemicals and Plastic Products\n- The tariff reduction schedule under the CEPT (Common Effective Preferential Tariff) scheme for petrochemicals and certain plastic products will revert to the tariff rates provided under EO 161 (s. 2003).\n- This reversion applies once specific domestic production facilities are in commercial operation.\n\n### Inclusion of Alternative Technologies for Domestic Production\n- Previously, the reversion condition focused solely on the commercial operation of a naphtha cracker plant.\n- The amended law broadens this to include any plant using other technologies capable of producing ethylene, propylene, and other related monomers domestically.\n\n### Role of Government Agencies in Implementation\n- The Department of Trade and Industry (DTI), in coordination with: \n - National Economic and Development Authority (NEDA),\n - Department of Finance (DOF),\n - Tariff Commission, and\n - Bureau of Customs,\n shall promulgate implementing rules and regulations governing the reversion of CEPT tariff rates.\n\n### Legal Authority and Effectivity\n- The President exercises authority under Section 402 of the Tariff and Customs Code of 1978 (Presidential Decree No. 1464), as amended, to amend the tariff schedules.\n- The Executive Order takes effect immediately upon its complete publication in two newspapers of general circulation.\n\n### Important Legal Concepts and Procedures\n- The CEPT scheme under ASEAN Free Trade Area (AFTA) aims to reduce tariffs among member countries but allows for temporary suspension and subsequent reversion based on domestic industry conditions.\n- Domestic production capacity for key petrochemical monomers influences tariff adjustments to protect and encourage local industry development.\n- Inter-agency coordination is mandated to ensure proper implementation and monitoring of the tariff rate changes.


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