Legal Basis and International Agreements
- Implements provisions under the Tariff and Customs Code of 1978, as amended.
- Relies on the Philippines' participation in the AICO Basic Agreement signed on 27 April 1996 and its Protocol to Amend signed on 21 April 2004.
- Follows Articles 5 and 7 of the AICO Basic Agreement concerning preferential tariff rates.
Entities and Products Covered
- Philippine Auto Components, Inc. (PACI) acts as the AICO entity in the Philippines.
- Denso (Thailand) Co., Ltd. acts as the AICO entity in Thailand.
- Products subject to duty modification are original equipment manufacturer (OEM) parts/components for motor vehicles.
- Specific items are listed and identified in the annex (Annex aAa) to the Executive Order.
Preferential Tariff Rate and Its Application
- Certain articles listed in Annex aAa shall be accorded a 0% tariff rate under the AICO scheme.
- The 0% tariff rate applies upon the entry of the articles or their withdrawal from warehouses in the Philippines intended for consumption.
- Preferential rates are subject to eligibility and compliance with Rules of Origin for the Common Effective Preferential Tariff (CEPT).
- Qualification for preferential rates requires presentation of a Certificate of Origin in Form aDa.
Implementation and Effectivity
- The modification applies immediately to the AICO entity from Thailand upon the Executive Order's effectivity.
- The Executive Order takes effect fifteen (15) days after its complete publication in two newspapers of general circulation in the Philippines.
Authority and Issuance
- Issued by the President of the Philippines under Section 402 of the Tariff and Customs Code of 1978, as amended.
- Officially signed by President Gloria Macapagal Arroyo and Executive Secretary Eduardo R. Ermita.
Important Legal Concepts
- Preferential tariff rates: Reduced or zero tariff rates extended by participating ASEAN countries under the AICO scheme to encourage industrial cooperation.
- Rules of Origin: Criteria ensuring that only goods originating from participating countries qualify for preferential tariffs.
- Certificate of Origin (Form aDa): Document proving qualification under the Rules of Origin.
- AICO Arrangement: Formal cooperative agreement between companies in member countries to facilitate and encourage trade and industrial collaboration through tariff concessions.