Legal basis and policy purpose
- Executive Order No. 214 is issued pursuant to the powers vested in the President under Section 402 of the Tariff and Customs Code of 1978, as amended.
- The Executive Order implements the Preferential Tariff Rates under the ASEAN Industrial Cooperation (AICO) Scheme.
- The AICO Scheme is intended to improve the competitive position of ASEAN companies by applying economies of scale and scope, supported by preferential import duties.
- The Executive Order is tied to the approved participation arrangement under the Goya, Inc. AICO arrangement.
Coverage of AICO participants and transactions
- The Executive Order applies to articles listed in Annex “A” that are classified under Section 104 of the Tariff and Customs Code of 1978, as amended.
- The AICO preferential rates are to be extended to AICO entities in Indonesia and Thailand participating in the approved Goya, Inc. arrangement.
- Section 2 sets the AICO effectivity dates for the AICO entities:
- Indonesia: effective 27 September 1999 for PT. Nestle Confectionery Indonesia.
- Thailand: effective 26 October 1999 for Nestle Foods (Thailand) Ltd.
- The Executive Order links tariff treatment to AICO qualifications and the applicable Rules of Origin for the CEPT, as evidenced by the required documentation.
Preferential tariff rates and affected goods
- Section 1 provides that the listed articles in Annex “A” are granted AICO rates of 3% and 5% as specified in Column 4.
- Annex “A” grants 3% AICO preferential tariff for these Thailand-sourced intermediate products:
- 0402.10 10 — Sweetened skimmed milk powder, bulk containers of gross weight 20 kgs or more.
- 0404.10 00 — Sweetened whey compound.
- Annex “A” grants 5% AICO preferential tariff for this Indonesia-sourced intermediate product:
- 1806.10 00 — Sweetened cocoa blend.
- The Annex ties each product to its AICO source company:
- Thailand: Nestle Foods (Thailand) Ltd.
- Indonesia: PT. Nestle Confectionery Indonesia
When and how the tariff benefit applies
- Section 4 provides that upon the Executive Order’s effectivity, the articles in Annex “A” that are entered or withdrawn from warehouses in the Philippines for consumption shall pay the AICO preferential tariff rates.
- Section 4 makes the preferential rates subject to qualification under the Rules of Origin for the CEPT.
- Section 4 requires compliance to be evidenced by the Certificate of Origin – Form “D”.
Automatic reduction mechanism and CEPT transition
- Section 3 provides that if the basic (MFN) Philippine rate of duty on the Annex “A” articles is later changed to a rate lower than the AICO rate, the article automatically receives the corresponding reduced rate of duty.
- Section 3 provides a transition rule: effective 1 January 2003, the final CEPT rate shall apply to the subject articles.
Schedule, operational dates, and parties’ eligibility link
- Section 2 anchors AICO rate availability to the certificate/effectivity timeline for the participating companies:
- 27 September 1999 (AICO eligibility for Indonesia entity).
- 26 October 1999 (AICO eligibility for Thailand entity).
- Section 4 applies the preferential tariff treatment upon entry/withdrawal in the Philippines for consumption.
- Annex “A” operationalizes the scheme by specifying the HS codes, product descriptions, source countries, and AICO preferential tariff percentages.
Sanctions, repeals, separability, or expiration
- Executive Order No. 214 contains no stated penalties, fines, repealing clauses, separability clause, or sunset/expiration period in its operative provisions.