EXECUTIVE ORDER NO. 396

Law Summary

Introduction

Executive Order No. 396, issued on December 31, 2004, aims to reduce the rates of import duty on compressed natural gas (CNG) motor vehicles and related equipment under the Tariff and Customs Code of 1978. This initiative is part of the broader Natural Gas Vehicle Program for Public Transport (NGVPPT) launched in 2002.

Purpose and Background

Legal Basis: The Executive Order is grounded in Section 401 of the Tariff and Customs Code of 1978, which empowers the President to alter import duty rates.
NGVPPT Objective: The NGVPPT promotes energy supply security through fuel diversification, utilizing indigenous natural gas as a cleaner alternative for transport.
Previous Executive Orders:
- EO 164: Reduced duty rates on NGV-related equipment to stimulate private sector involvement.
- EO 290: Implemented the NGVPPT effectively.

Import Duty Reduction

Section 1: Details the articles listed in Annex "A" that will be subject to the Most-Favored-Nation (MFN) import duty rates as per the specified schedule.
- Key Definitions:
  - Most-Favored-Nation (MFN) Rate: A tariff rate that must be applied equally to all countries.
Important Requirements:
- Articles listed in Annex "A" are to be levied MFN rates upon entry or withdrawal from warehouses in the Philippines.

Nomenclature and Tariff Headings

Section 2: Tariff headings not specifically listed or marked as "X X X" will continue under existing rates and nomenclature.
- Key Detail: Provides clarity on which items remain unaffected by the new order.

Implementation and Regulation

Section 4: The Department of Energy, alongside other governmental bodies, is tasked with creating rules and regulations to enforce this Executive Order.
- Relevant Authorities:
  - Department of Trade and Industry
  - National Economic and Development Authority
  - Bureau of Customs

Revocation of Prior Issuances

Section 5: Any previous presidential issuances or regulations inconsistent with this Executive Order are revoked or modified.

Effectivity

Section 6: The Executive Order will take effect 30 days after its publication in two newspapers of general circulation.
- Key Detail: This establishes the timeline for the implementation of the new duties.

Key Takeaways

Executive Order No. 396 reduces import duties on CNG vehicles and related equipment to encourage investment in the NGVPPT.
It establishes a framework for the implementation of reduced duty rates and revokes any conflicting prior regulations.
The order will become effective 30 days post-publication, emphasizing the need for timely dissemination and compliance among stakeholders.