Establishment and Scope of the Zone
- Creation of the Cagayan Special Economic Zone and Free Port
- Encompasses Municipality of Santa Ana and islands of Fuga, Barit, and Mabbag in Municipality of Aparri, Province of Cagayan
Governing Principles of the Zone
- Operation as a self-sustaining industrial, commercial, financial, investment, tourism/recreational center, and free port
- Creation of employment opportunities and attraction of foreign investments
- Fiscal incentives under Presidential Decree No. 66 and Omnibus Investments Code
- Exemption from local and national taxes; substituted with a 5% gross income remittance allocated among national government, provincial government, municipalities, and CEZA
- Applicability of existing banking laws and BSP regulations for financial institutions
- Permanent resident status to foreign investors with minimum $150,000 capital investment, including family members
- Issuance of renewable working visas to foreign executives and specialized technicians
- Retention of local government autonomy under Republic Act No. 7160 for areas within the zone
Creation and Corporate Nature of CEZA
- Establishment of the Cagayan Economic Zone Authority (CEZA) as a corporate body managing the Zone
- 50-year corporate franchise subject to congressional extension
Powers and Functions of CEZA
- Corporate acts: adoption of seal, property transactions, legal suits, eminent domain
- Fundraising via borrowing and issuing securities
- Approval and regulation of local and foreign businesses
- Authorization and operation of utilities, infrastructure, and port services
- Prioritization of private investors for contracts and franchises
- Operation of tourism-related activities including gambling and recreational facilities
- Environmental protection of forests, beaches, coral reefs, with a permanent logging ban
- Pollution control measures
- Provision and maintenance of security forces and firefighting capability
- Establishment of subsidiary corporations
- Rulemaking to implement the Act
- Exercise of incidental powers necessary for fulfilling objectives
Governance Structure - Board of Directors
- 15-member Board chaired by Secretary of Trade and Industry
- Includes national government representatives, local mayors, labor representatives, business/investor representatives, and private sector members
- Appointment by President for 3-year terms with requirements for qualifications
- Reasonable per diem compensation determined by the Department of Budget and Management
Administration and Leadership
- Appointment of full-time administrator and chief executive officer by the President
- CEO accountable to the Board and President for Zone management
Capitalization and Financial Provisions
- Authorized capital stock of 2 billion shares at minimum P10 each
- Initial government subscription of 300 million shares
- Provision for increasing issue value and selling up to 40% shares to the public
- Government ownership not falling below 60% of issued capital stock
Supervisory and Coordination Mechanisms
- Direct supervision by the Office of the President for policy and coordination pending other agency establishment
Conflict Resolution with Local Governments
- CEZA decisions prevail in conflicts with Santa Ana and Aparri municipalities except in defense and security matters
Legal and Audit Provisions
- CEZA to maintain internal legal counsel with supervisory oversight
- Engagement of outside legal counsel as required
- Full-time auditor appointed by the Commission on Audit for oversight
- Annual audit report submitted to the President and Congress
General Provisions
- Separability clause preserving validity of remaining provisions if any part is invalid
- Repealing clause nullifying inconsistent laws and issuances
- Effectivity upon publication in a newspaper of general circulation
This summary encapsulates all key legal concepts, provisions, and operational mechanisms defined in the Act establishing the Cagayan Special Economic Zone and Free Port and the Cagayan Economic Zone Authority (CEZA).