Moratorium on New Duty-Free Stores in SEFZ

Executive Order No. 419 invokes the enabling authority of the President under the powers vested in me by law.
The Order is grounded on Republic Act No. 7227, which established the Subic Bay Freeport Zone and the Clark Special Economic Zone.
Executive Order No. 419 cites Executive Order Nos. 80, 97 and 97-A as the bases for granting duty and tax free incentives to businesses operating inside SEFZs of Subic and Clark.
The incentives described relate to importations of raw materials, capital goods and equipment brought into the Subic and Clark SEFZs.

Executive Order No. 419 states that duty and tax free incentives in SEFZs led to the proliferation of duty free stores/outlets and expanded product lines.
The Order directs urgent attention to the adverse effects on local manufacturing and retailing enterprises caused by duty free goods entering through duty free stores/outlets.
The Order’s remedial objective is to pause further growth of duty free retail outlets pending establishment of appropriate controls.

Section 1 imposes a moratorium/suspension on the issuance of licenses/permits to operate new duty free stores/outlets in the SEFZs of Subic and Clark.
The moratorium applies until the control systems are established, and it is further conditioned on systems certified by the Bureau of Customs.
The moratorium covers all proposals for:
- the issuance of new permits;
- the opening of new stores/outlets; and
- the expansion of existing duty free stores/outlets.
The coverage is confined to Subic and Clark SEFZs, and the affected activity is licensing/permits for duty free stores/outlets.

Section 1 suspends issuance of new licenses/permits for new duty free stores/outlets in the SEFZs of Subic and Clark.
Section 1 suspends not only opening new stores/outlets but also expansion of existing duty free stores/outlets.
Section 1 suspends consideration and processing of proposals for permit issuance and store/outlet expansion during the moratorium period.
The moratorium remains in force until the Bureau of Customs certifies that the required control systems have been established.

Section 2 provides that all executive orders, letters of instructions, issuances, memoranda and proclamations inconsistent with Executive Order No. 419 are repealed or amended accordingly.
Section 3 declares the provisions separable.
Section 3 provides that if one or more provisions (or parts) are declared unconstitutional, the invalidity does not affect the validity of the other provisions.