Law Summary

Introduction

Executive Order No. 448, issued on July 22, 2005, modifies the import duty rates for certain articles under the Tariff and Customs Code of 1978 as part of the Philippines' implementation of the ASEAN Integration System of Preferences (AISP). This Order reflects the commitments made during the ASEAN Informal Summit and subsequent meetings aimed at enhancing the integration of ASEAN member states.

ASEAN Integration System of Preferences (AISP)

• Purpose: The AISP aims to reduce the development gap between older and newer ASEAN members by providing tariff concessions to specific products imported from preference-receiving countries.
• Preference-Giving Countries: Brunei, Indonesia, Malaysia, Philippines, Singapore, and Thailand.
• Preference-Receiving Countries: Cambodia, Lao PDR, Myanmar, and Vietnam.

Legal Authority

• Empowerment: The President is authorized under Section 402 of the Tariff and Customs Code of 1978, as amended, to adjust import duties upon the recommendation of the National Economic and Development Authority (NEDA).

Specific Provisions of the Executive Order

Section 1: Adjustment of Import Duties

• Modification: Articles listed in Annex A are to be subjected to the AISP duty rates when imported from the specified preference-receiving countries.
• Key Requirement: Compliance with the AISP rates as indicated in the annex.

Section 2: Future Duty Changes

• Automatic Adjustment: If the basic (MFN) Philippine rate of duty on any listed article decreases below the AISP rate, the lower rate will automatically apply.

Section 3: Rules of Origin

• Condition for Duty Rates: Articles must meet a 40% single country content requirement from Cambodia, Lao PDR, Myanmar, or Vietnam to qualify for the AISP rates.

Section 4: Repeal of Inconsistent Issuances

• Revisions: All previous issuances or regulations inconsistent with this Executive Order are repealed or modified accordingly.

Section 5: Effectivity

• Publication Requirement: The Executive Order takes effect immediately after publication in two newspapers of general circulation.

Annex A: Articles Granted Concession

• Contents: Lists specific articles with corresponding AISP duty rates and their respective preference-receiving countries.
  • Example Entries:
    • Plants for pharmacy (Tariff Code 1211.90.11) - 0% duty from Lao PDR.
    • Sawn wood classified under various tariff codes - 0% duty from Cambodia, Lao PDR, Myanmar, and Vietnam.

Key Takeaways

• Executive Order No. 448 modifies import duties to facilitate ASEAN integration, specifically benefiting preference-receiving countries.
• The President has the authority to adjust duties based on NEDA recommendations.
• Importers must comply with specified duty rates and rules of origin to benefit from reduced tariffs.
• This Order supersedes conflicting regulations and is effective upon publication.

This summary captures the critical aspects of Executive Order No. 448, detailing its purpose, legal authority, provisions on import duties, and the specifics of the articles covered.