Title
Administrative fines for trade violations
Law
Dti Department Administrative Order No. 7, S. 1999
Decision Date
Jul 14, 1999
Revised schedule of administrative fines for violations of consumer and trade laws in the Philippines, with fines ranging from P500 to P300,000 depending on the offense, and additional fines for continuing violations and specific circumstances.
revised schedule
administrative fines
violations

Legal basis and implementing authority

  • The Order is promulgated to implement Article 164(e) of Republic Act No. 7394 (Consumer Act of the Philippines).
  • The Order is promulgated to implement Section 6(e) of Executive Order No. 913.
  • The Order is promulgated to implement Section 10(9) of Republic Act No. 7581.
  • The Order is directed to provide rules for information, guidance, and compliance of all concerned parties.

Coverage, scope, and interpretation rules

  • The Order covers administrative fines relative to R.A. 7394, R.A. 7581, and E.O. 913, including specified laws under E.O. 913.
  • For E.O. 913, the Order covers violations related to R.A. No. 71 (Price Tag Law), Act No. 3883 as amended (Business Name Law), Act No. 2728 as amended by Acts 3715 & 3969 (Law on Brokerage), R.A. 3952 (Bulk Sales Law), and Act No. 3893 (Bonded Warehouse Act).
  • In case of doubt, the Order requires interpretation that considers the best interest of consumers.
  • Fines are scheduled by type of violating law and by type of operator: retailer, wholesaler, and manufacturer.

Consumer Act (R.A. 7394) fines schedule

  • Administrative fines for violations of R.A. 7394 are set at an amount deemed reasonable by the Secretary, but not less than PHP 500.00 and not more than PHP 300,000.00, depending on gravity of the offense.
  • For R.A. 7394 continuing violations, an additional fine of not more than PHP 1,000.00 is imposed for each day of continuing violation.
  • The Order applies the R.A. 7394 fine provisions to violations of the following subject areas:
    • Price Tag
    • Metrication
    • Advertising and Sales Promotion
    • Labeling and Fair Packaging
    • Deceptive, Unfair and Unconscionable Sales Act and Practices, including Home Solicitation, Referral Sales, Chain Distribution, and Other Deceptive, Unfair and Unconscionable Sales Act & Practice
    • Consumer Product and Service Warranties
    • Liability for Products and Services
    • Regulation of Repair and Service Firms
    • Product Quality & Safety
  • For price tag and metrication violations under R.A. 7394, the Secretary uses Schedule I as the basis for imposing administrative fines:
    • Schedule I – Basic Fine
      • Retailer: PHP 500.00
      • Wholesaler: PHP 1,000.00
      • Manufacturer: PHP 2,000.00
    • Schedule I – Minimum
      • Retailer: PHP 500–10,000.00
      • Wholesaler: PHP 1,000–25,000.00
      • Manufacturer: PHP 2,000–50,000.00
    • Schedule I – Medium
      • Retailer: PHP 1,000–25,000.00
      • Wholesaler: PHP 2,000–50,000.00
      • Manufacturer: PHP 4,000–100,000.00
    • Schedule I – Maximum
      • Retailer: PHP 2,000–50,000.00
      • Wholesaler: PHP 4,000–100,000.00
      • Manufacturer: PHP 8,000–150,000.00
  • For R.A. 7394 violations under the same framework (except categories identified by the Order in the scheduling clause), the Secretary uses Schedule II as the basis:
    • Schedule II – Basic Fine
      • Retailer: PHP 500.00
      • Wholesaler: PHP 1,000.00
      • Manufacturer: PHP 2,000.00
    • Schedule II – Minimum
      • Retailer: PHP 500–50,000.00
      • Wholesaler: PHP 1,000–50,000.00
      • Manufacturer: PHP 2,000–100,000.00
    • Schedule II – Medium
      • Retailer: PHP 1,000–100,000.00
      • Wholesaler: PHP 2,000–100,000.00
      • Manufacturer: PHP 4,000–150,000.00
    • Schedule II – Maximum
      • Retailer: PHP 2,000–150,000.00
      • Wholesaler: PHP 4,000–150,000.00
      • Manufacturer: PHP 8,000–300,000.00
  • When the offender is engaged in two or more activities, the Order requires using the activity with the higher penalty as the basis for imposing the appropriate fine.

E.O. 913 trade law fines (general framework)

  • For violations of trade and industry laws under E.O. 913 covered by the Order, the imposed administrative fine must be deemed reasonable by the Secretary, but not less than PHP 500.00 and not more than PHP 150,000.00, after considering surrounding circumstances.
  • The Order requires using Schedule III after consideration of the attendant circumstances provided in Article VII and Article VIII:
    • Schedule III – Basic Fine
      • Retailer: PHP 500.00
      • Wholesaler: PHP 1,000.00
      • Manufacturer: PHP 2,000.00
    • Schedule III – Minimum
      • Retailer: PHP 500–10,000.00
      • Wholesaler: PHP 1,000–25,000.00
      • Manufacturer: PHP 2,000–50,000.00
    • Schedule III – Medium
      • Retailer: PHP 1,000–25,000.00
      • Wholesaler: PHP 2,000–50,000.00
      • Manufacturer: PHP 4,000–100,000.00
    • Schedule III – Maximum
      • Retailer: PHP 2,000–50,000.00
      • Wholesaler: PHP 4,000–100,000.00
      • Manufacturer: PHP 8,000–150,000.00
  • When the offender is engaged in two or more activities, the Order requires imposing the fine corresponding to the higher fine, subject to the law’s other requirements.

Price Act (R.A. 7581) fines

  • The Order requires that violations of the Price Act (R.A. 7581) be imposed with an administrative fine of not less than PHP 1,000.00 and not more than PHP 1,000,000.00.
  • The Order requires imposition of the Price Act fine subject to circumstances provided in the Order and after due notice and hearing.
  • For Price Act fine determination, the Order requires using Schedule IV:
    • Schedule IV – Basic Fine
      • Retailer: PHP 1,000.00
      • Wholesaler: PHP 2,000.00
      • Manufacturer: PHP 3,000.00
    • Schedule IV – Minimum
      • Retailer: PHP 2,000–75,000.00
      • Wholesaler: PHP 3,000–150,000.00
      • Manufacturer: PHP 4,000–250,000.00
    • Schedule IV – Medium
      • Retailer: PHP 3,000–150,000.00
      • Wholesaler: PHP 4,000–250,000.00
      • Manufacturer: PHP 8,000–500,000.00
    • Schedule IV – Maximum
      • Retailer: PHP 4,000–300,000.00
      • Wholesaler: PHP 8,000–500,000.00
      • Manufacturer: PHP 20,000–1,000,000.00
  • When the offender is engaged in two or more activities under the Price Act scheme, the Order requires imposing the fine corresponding to the activity with the higher fine, subject to the law’s other requirements.

Circumstances affecting the fine

  • The Order requires considering mitigating, aggravating, and alternative circumstances to arrive at an appropriate fine.
  • The Order identifies the following as mitigating circumstances:
    • Voluntary admission of guilt
    • Willingness to enter into compromise agreement
    • Willingness to furnish evidence and/or testify against supplier/manufacturer
    • Willingness to execute undertaking to cease and desist from violating any trade and industry law in the future
    • Good faith
    • Compliance with preventive measure of closure as directed
    • Any analogous circumstances
  • The Order identifies the following as aggravating circumstances:
    • 2nd or more offense of any TIL
    • Multiple violation of Trade & Industry Law at one instance
    • Violation of Trade & Industry law while undergoing proceedings for violation of another/same TIL
    • Violation by means of deceit and/or misrepresentation
    • Falsification of Official Receipts and/or documents as a means to hide violation
    • Non-issuance and/or refusal to issue receipts when required by law
    • Unjustified absence at mediation (bad faith)
    • Non-compliance and/or refusal to comply with the agreement entered into
    • Employment of force, violence, intimidation by respondent against complainant in securing concession
    • Taking advantage of emergency situation and the like
    • Bribery or attempt to bribe public offices to stifle prosecution, without prejudice to public officer’s prosecution
    • Non-compliance with any lawful order, decision, award by mediation/arbitration/adjudication officer
    • Concealment or attempt to conceal any piece of evidence
    • Engagement in trade by person whose license/permit or authority had been previously canceled or revoked for violation of Trade & Industry Laws, before lapse of period for voluntary closure
    • When the offender is a public officer
    • When the offender is not a public officer but connived with public officer, without prejudice to the latter’s prosecution
    • Resisting public officer from validly enforcing lawful order
    • Failure/Refusal without valid reasons to comply or execute any undertaking (e.g., to desist from violating Trade & Industry law)
    • Commencement or engagement in trade/business prior to issuance of license/permit or authority to do business
    • Failure/non compliance with preventive measure of closure and desist order
    • Assault upon the person, property or relatives within the 4th civil degree of the enforcing officer by reason of their function
    • Engagement where respondent procures from the Bureau the registration, accreditation, license, authority and/or permit to conduct business through false or fraudulent misrepresentation orally or in writing or by other fraudulent means
    • Any analogous circumstances
  • The Order identifies the following as alternative circumstances, which may be mitigating or aggravating:
    • First offense: mitigating if involving small quantity, otherwise aggravating
    • Quantity/Volumes of goods involved: mitigating if small quantity, otherwise aggravating
    • Nature of goods: aggravating if basic/prime goods, mitigating if luxury
    • Degree of education of violator
    • Capitalization, determined by reference to the respondent’s Financial Statements; if unavailable or if an estimate is necessary, capitalization is determined by computing the total value of violative goods.

Payment, additional daily charges, and other penalties

  • The Order requires payment of fines in a lump sum not later than 30 days from the date the undertaking is submitted.
  • The Order allows installment payment where the respondent is financially incapable to pay the designated fine in lump sum, with installment terms not exceeding 12 months.
  • The Order requires submission of an undertaking to pay in installment specifying the due dates of each installment when installment payment is allowed.
  • The Order authorizes, in addition to the administrative fine, other penalties such as closure, confiscation, and suspension when circumstances warrant.
  • The Order allows the respondent to voluntarily pay a fine in excess of the maximum provided under Article 64 of R.A. 7394, Section 2(2) of E.O. 913, and Section 10(9) of R.A. 7581, as the case may be, in lieu of imposition of other cited penalties.
  • For every day of continuing violation, the Order requires payment of PHP 1,000 over and above the administrative fine imposed.

Fine computation and minimum/medium/maximum rules

  • The Order requires imposing basic fines based on the schedule applicable under the rules.
  • The Order requires determining the additional fine and whether the fine is minimum, medium, or maximum using these rules:
    • If there is neither mitigating nor aggravating circumstance, impose the Medium fine
    • If there is only mitigating circumstances, impose the Minimum fine
    • If there is only aggravating circumstances, impose the Maximum fine
    • If both mitigating and aggravating circumstances exist, the Order requires applying the rule on offsetting first, and then imposing the remaining amount using the applicable approach referenced in the Order
  • The Order imposes a special rule for a first offense involving sari-sari stores and wet market stalls with capitalization of not more than PHP 50,000.00: only the basic fine of PHP 500.00 is imposed.

Final provisions: repeals and effectivity

  • The Order repeals or amends inconsistent rules and regulations or parts thereof.
  • The Order takes effect after 15 days following completion of publication in the Official Gazette or in a newspaper of general circulation.

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