TARIFF6: SPECIAL DUTIES AND TRADE REMEDIES CMTA PROVISIONS ON SPECIAL DUTIES

OVERVIEW AND TRADE REMEDY MEASURES

TARIFF SEC. 709. Government’s Right of Compulsory Acquisition
- Generally, tariff is the tax that is imposed and made payable In order to protect government revenues against
upon wares, articles or merchandise that are imported into or undervaluation of goods, the Commissioner may, motu
exported from a specific state. proprio or upon the recommendation of the District Collector,
- In the alternative, it means customs duties, toll or tribute acquire imported goods under question for a price equal to
payable upon merchandise to the general government. their declared customs value plus any duties already paid on
- Tariff, which is synonymous to customs duties, means the taxes the goods, payment for which shall be made within ten (10)
imposed on articles that are imported into or exported from a working days from issuance of a warrant signed by the
country. Commissioner for the acquisition of such goods.
An importer who is dissatisfied with a decision of the
ALTERNATIVE DEFINITIONS OF TARIFF
Commissioner pertaining to this section may, within twenty
- List of articles liable to duties;
(20) working days after the date on which notice of the
- An official list or schedule setting forth the several customs
decision is given, appeal to the Secretary of Finance, and
duties to be imposed on imports and exports.
thereafter If still dissatisfied, to the CTA as provided for in
- It is a cartel of commerce, a book of rates, a table or catalogue,
Section 1136 of this Act.
drawn usually in alphabetical order, containing the names of
Where no appeal is made by the importer, or upon
several kinds of merchandise, with the duties or customs to be
reaffirmation of the Commissioner's decision during the
paid for the same, as settled by authority, or agreed between
appeals process, the Bureau or its agents shall sell the
several princes and states that hold commerce together.
acquired goods pursuant to existing laws and regulations.
- Tariff, also called customs duty, tax levied upon goods as they
Nothing in this section limits or affects any other powers
cross national boundaries, usually by the government of the
of the Bureau with respect to the disposition of the goods or
importing country. The words tariff, duty, and customs can be
any liability of the importer or any other person with respect
used interchangeably.
to an offense committed in the importation of the goods.
KINDS OF TARIFFS OR CUSTOMS DUTIES
SEC. 710. Marking of Imported Goods and Containers.
1. Regular tariffs or regular customs duties
(A) Marking of Goods – Except as hereinafter provided, all
These are taxes that are imposed or assessed upon
goods of foreign origin imported into the Philippines or their
merchandise from, or exported to, a foreign country, for
containers, as provided in subsection (B) hereof shall be
the purpose of raising revenues.
conspicuously marked in any official language of the
2. Special tariffs or special customs duties Philippines as legibly, indelibly and permanently as the nature
Special customs duties are additional import duties imposed of the goods or container will permit and in such manner as to
on specific kinds of imported articles under certain indicate to an ultimate purchaser in the Philippines the name
conditions and for particular purpose. of the country of origin of the goods. Pursuant thereto, the
Modern tariff and customs practice refer to the “special customs Commissioner shall, with the approval of the Secretary of
duties” as “trade remedy measures”. Finance:
(1) Determine the character of words and phrases or
TRADE REMEDY MEASURES abbreviation thereof which shall be acceptable as
- Trade remedies are border measures applied by governments indicating the country of origin and prescribe any
on imports of a product where the total imports have surged reasonable method of marking, whether by printing,
(safeguards) or the imports are dumped (Anti-dumping) or over stenciling, stamping, branding, labeling or by any other
subsidized (countervailing measures) and where the imports in reasonable method, and in a conspicuous place on the
question have been found to have injured the competing goods or container where the marking' shall appear;
domestic industries. (2) Require the addition of other words or symbols
How can trade remedies affect small businesses that export? which may be appropriate to prevent deception or
- Where small businesses are exporting a product to a market in mistake as to the origin of the goods or as to the origin
which a trade remedy on that product is in effect, the product of any other goods with which such imported goods is
will be subject to additional import duties, or in the case of usually combined subsequent to importation but before
safeguards possibly quantitative restrictions. These remedies will delivery to an ultimate purchaser; and
increase the costs of and regulations for entering the goods into (3) Authorize the exception of any goods from the
the export market, beyond the normally applicable customs requirements of marking if:
duties and other taxes applicable to imports. (i) Such goods are incapable of being marked;
- If a small business participated in the investigation leading up to (ii) Such goods cannot be marked prior to shipment
the application of a trade remedy measure, this would imply to the Philippines without injury;
work and associated costs in providing the information required (iii) Such goods cannot be marked prior to shipment
in the investigation, and in representing the business’s interests to the Philippines, except at an expense
before the investigating authority in the importing country that is economically prohibitive of their importation;
conducting the investigation.
 (iv) The marking of a container of such goods will Code Of The Philippines, As Amended By Republic Act No.
reasonably indicate the origin of such goods; 7843, And For Other Purposes
(v) Such goods are crude substances; • SEC. 301. Anti-Dumping Duty
(vi) Such goods are imported for use by the importer (a) Whenever any product, commodity or article of commerce
and not intended for sale in their imported or any imported into the Philippines at an export price less than its
other form; normal value in the ordinary course of trade for the like
(vii) Such goods are to be processed in the Philippines product, commodity or article destined for consumption in
by the importer or for the importer's account other the exporting country is causing or is threatening to cause
than for the purpose of concealing the origin of such material injury to a domestic industry, or materially retarding
goods and in such manner that any mark the establishment of a domestic industry, or materially
contemplated by this section would necessarily be retarding the establishment of a domestic industry producing
obliterated, destroyed, or permanently concealed; the like product.
(viii) An ultimate purchaser, by reason of the character Penalty: imposition of an anti-dumping duty equal to the
of such goods or by reason of the circumstances of margin of dumping on such product, in addition to ordinary
their importation, must necessarily know the country duties, taxes and charges imposed by law on the imported
of origin of such goods even though they are not product, commodity or article.
marked to indicate their origin; In the case where products are not imported directly
(ix) Such goods were produced more than twenty (20) from the country of origin but are exported to the Philippines
years prior to their importation into the Philippines; or from an intermediate country, the price at which the products
(x) Such goods cannot be marked after importation are sold from the country of export to the Philippines shall
except at an expense which is economically normally be compared with the comparable price in the
prohibitive, and the failure to mark the goods before country of export. However, comparison may be made with
importation was not due to any purpose of the the price in the country of origin.
importer, producer, seller or shipper to avoid (b) Initiation of Action. An anti-dumping investigation may be
compliance with this section. initiated upon receipt of a written application from any
(B) Marking of Containers – Whenever goods are exempt under person whether natural or juridical, representing a domestic
paragraph (3) of subsection (A) of this section from the industry, which shall include evidence of a) dumping, b) injury,
requirements of marking, the immediate container, if any, of and c) causal link between the dumped imports and the
such goods, or such other container or containers of such goods, alIeged injury.
shall be marked in such manner as to indicate to an ultimate The application shall contain such information as is
purchaser in the Philippines the name of the country of origin of reasonably, available to the applicant on the following :
such goods in any official language of the Philippines, subject to 1. the identity of the applicant and a description of
all provisions of this section, including the same exceptions as are the volume and the value of the domestic production
applicable to goods under paragraph (3) of subsection (A). of the like product of the applicant;
(C) Pine for Failure to Mark – If, at the time of importation any 2. a complete description of the alleged dumped
good or its container, as provided in subsection (B) hereof, is not product, the name of the country of origin or export
marked in accordance with the requirements of this section, under consideration, the identity of each known
there shall be levied, collected, and paid upon such good a exporter or foreign producer, and a list of known
marking duty of five percent (5%) of dutiable value, which shall persons importing the product under consideration;
be deemed to have accrued at the time of importation, 3. information on the normal value of the product
(D) Release Withheld Until Marked – No imported goods held in under consideration in the country of origin/export;
customs custody for inspection, examination/assessment shall be 4. information on the evolution of the volume of the
released until such goods or their containers shall have been alleged dumped imports, the effect of these imports
marked in accordance with the requirements of this section and on the price of the like product in domestic market,
until the amount of duty estimated to be payable under and the consequent impact of the imports on the
subsection (C) of this section shall have been deposited. domestic industry.
(E) The failure or refusal of the owner or importer to mark the Philippine Trade, Agriculture or Finance Attachés and
goods as herein required within a period of 30 days after due other Consular Officials or Attachés in the concerned
notice shall constitute as an act of abandonment of said goods exporting member countries are mandated to furnish the
and their disposition shall be governed by the provisions of this applicant pertinent information or documents to support his
Act relative to abandonment of imported goods. complaint within a period not exceeding thirty (30) days from
SEC. 711. Dumping Duty. – The provisions of Republic Act No. receipt of a request.
8752, otherwise known as the "Anti-Dumping Act of 1999", are The application shall be filed with the Secretary of Trade
hereby adopted. and Industry in the case of non-agricultural product,
commodity or article, or with the Secretary of Agriculture in
REPUBLIC ACT NO. 8752: An Act Providing The Rules For The the case of agricultural product, commodity or article. The
Imposition Of An Anti-Dumping Duty, Amending For The Purpose Secretary shall require the petitioner to post a surety bond in
Section 301, Part 2, Title Ii, Book I Of The Tariff And Customs such reasonable amount as to answer for any and all damages
which the importer may sustain by reason of the filing of a
frivolous petition. He shall immediately release the surety bond representative of the exporting territory. If the respondent
upon making an affirmative preliminary determination. fails to submit his answer, he shall declared in default.
The application shall be considered to have been made “‘by (f) Preliminary Determination. Not later than thirty (30)
or on behalf of the domestic industry” if it is supported by those working days from receipt of the answer of the respondent
domestic producers whose collective output constitutes more importer, exporter, foreign producer, exporting
than fifty percent (50%) of the total production of the like member-country and other interested parties, the Secretary
product produced by that portion of the domestic industry shall, on the basis of the application of the aggrieved party
expressing either support for or opposition to the application. and the answer of the respondent/s and their respective
Within five (5) working days from receipt of a properly supporting documents or information, make a preliminary
documented application, the Secretary shall examine the determination of the application for the imposition of an
accuracy and adequacy of the petition to determine whether anti—dumping duty.
there is sufficient evidence to justify the initiation of In the preliminary determination, the Secretary shall
investigation. If there is no sufficient evidence to justify initiation, essentially determine the following:
the Secretary shall dismiss the petition and properly notify the (1) Price difference between the export price and the
Secretary of Finance, the Commissioner of Customs, and other normal value of the article in question in the country
parties concerned regarding such dismissal. The Secretary shall of export of origin;
extend legal, technical, and other assistance to the concerned (2) The presence and extent of material injury threat
domestic producers and their organizations at all stages of the injury to the domestic industry producing like product
anti-dumping action. or the material retardation like of the establishment
(c) Notice to the Secretary of Finance. Upon receipt of the of a domestic industry industry; and
application, the Secretary shall, without delay, notify the (3) The causal relationship between the allegedly
Secretary of Finance and furnish him with a complete copy of the dumped product, commodity or article and the
application, or information in case the initiation is made on his material injury or threat of material injury to the
own motion including its annexes, if any. The Secretary of affected domestic industry or material retardation of
Finance shall immediately inform the Commissioner of Customs the establishment of the domestic industry.
regarding the filing and pendency of the application or The preliminary finding of the Secretary, together with
information and instruct him to gather and to furnish the the records of the case shall, within three (3) days, be
Secretary within five (5) days from receipt of the instructions of transmitted by the Secretary to the Commission for its
the Secretary of Finance copies of all import entries and relevant immediate formal investigations. In case his preliminary
documents covering such allegedly dumped product, commodity finding is affirmative, the burden of proof is shifted to the
or article which entered the Philippines during the last twelve (12) respondent to rebut the preIiminary finding. The Secretary
months preceding the date of application. The Commissioner of shall immediately issue, through the Secretary of Finance,
Customs shall also make such similar additional reports on the written instructions to the Commissioner of Customs to
number, volume, and value of the importation of the allegedly impose within three (3) days from receipt of instructions a
dumped product, commodity or article to the Secretary every ten cash bond equal to the provisionally estimated anti-dumping
(10) days thereafter. duty but not greater than the provisionally estimated
(d) Notice to Exporting Member-Country. Upon receipt of a anti-dumping margin of dumping in addition to any other
properly documented application and before proceeding to taxes and charges imposed by law on articles. The cash bond
initiate an investigation, the Secretary shall notify the shall be deposited with the government depository bank and
government of the exporting country about the impending shall be held in trust for the respondent.
anti-dumping investigation. However, the Secretary shall refrain (g) Termination of Investigation. The Secretary or the
from publicizing the application for the initiation of the Commission, as the case may be, shall motu proprio terminate
investigation before a decision has been made to initiate an the investigation at any stage of the proceedings if the
investigation. provisionally estimated margin of dumping is less than two
(e) Notice to Concerned Parties and Submission of Evidences. percent (2%) of export price or the volume of dumped
Within two (2) days from initiation of the investigation and after imports or injury is negligible. The volume of dumped imports
having notified the exporting country, the Secretary shall identify from a particular country shall normally be regarded as
all interested parties, i.e., protestee-importer, exporter and/or negligible if it accounts for less than three percent (3%) of the
foreign producer, notify and require them to submit within thirty imports of the like article in the Philippines unless countries
(30) days from receipt of such notice evidences and information which individually account for less than three percent (3%) of
or reply to the questionnaire to dispute the allegations contained the imports of the like article in the Philippines collectively
in the application. At this point, the respondent is given the account for more than seven percent (7%) of the total imports
opportunity to present evidences to prove that he is not involved of that article.
in dumping. He shall furnish them with a copy of the application (h) Investigation of the Commission. Within three (3) working
and its annexes subject to the requirement to protect days upon its receipt of the records of the case from the
confidential information. The notice shall be deemed to have Secretary, the Commission shall start the formal investigation
been received five (5) days from the date on which it was sent to and shall accordingly notify in writing all parties on record and,
the respondent or transmitted to the appropriate diplomatic in addition, give public notice of the exact initial date, time
representative of the exporting member, or an official and place of the formal investigation through the publication
of such particulars and a concise summary of the petition in two
(2) newspapers of general circulation.
The Commission is hereby authorized to require any
interested party to allow its access to or otherwise provide
necessary information to enable the Commission to expedite the
investigation.
The formal investigation shall be conducted in a summary
manner. No dilatory tactics or unnecessary or unjustified delays
shall be allowed and the technical rules of evidence used in
regular court proceedings shall not be applied.
In case any or all of the parties on record fail to submit their
answers to questionnaires/position papers within the prescribed
period, the Commission shall base its findings on the best
available information.
SEC. 712. Safeguard Duty - The provisions of Republic Act No. 8800, The petition shall include documentary evidence supporting the
otherwise known as the “Safeguard Measures Act,” are hereby facts that are essential to establish:
adopted. 1. an increase in imports of like or directly competitive
products;
• REPUBLIC ACT NO. 8800: An Act Protecting Local Industries By
2. the existence of serious injury or threat thereof to the
Providing Safeguard Measures To Be Undertaken In Response To
domestic industry; and
Increased Imports And Providing Penalties For Violation Thereof
3. the causal link between the increased imports of the
SEC. 1. Short Title - This Act shall be known as the "Safeguard
product under consideration and the serious injury or threat
Measures Act."
thereof.
SEC. 2. Declaration of Policy - The State shall promote the
The Secretary shall review the accuracy and adequacy of the
competitiveness of domestic industries and producers based on
evidence adduced in the petition to determine the existence of
sound industrial and agricultural development policies, and the
a prima facie case that will justify the initiation of a preliminary
efficient use of human, natural and technical resources. In pursuit of
investigation within five (5) days from receipt of the petition.
this goal and in the public interest, the State shall provide safeguard
The Secretary may also initiate action upon the request of the
measures to protect domestic industries and producers from
President; or a resolution of the House or Senate Committee on
increased imports which cause or threaten to cause serious injury to
Agriculture, or House or Senate Committee on Trade & Commerce.
those domestic industries and producers.
In the absence of such a petition, the Secretary may, motu
SEC. 3. Scope of Application - This Act shall apply to products being
proprio, initiate a preliminary safeguard investigation if there is
imported into the country irrespective of source.
evidence that increased imports of the product under consideration
SEC. 4. Definitions - For the purposes of this Act, the following terms
are a substantial cause of, or are threatening to substantially cause,
are defined as follows:
serious injury to the domestic industry.
Critical circumstances shall mean circumstances where there is
The Secretary may extend legal, technical and other assistance to
prima facie evidence that increased imports, whether absolute
the concerned domestic producers and their organizations at all
or relative to domestic production, are a substantial cause of
stages of the safeguard action.
serious injury or threat thereof to the domestic industry and
SEC. 7. Preliminary Determination - Not later than thirty (30) days
that delay in taking action under this Act would cause damage
from receipt of the petition or a motu proprio initiation of the
to the industry that would be difficult to repair;
preliminary safeguard investigation, the Secretary shall, on the basis
Directly competitive products shall mean domestically produced
of the evidence and submission of the interested parties, make a
substitutable products;
preliminary determination that increased imports of the product
Market access opportunity shall mean the percentage of the
under consideration are a substantial cause of, or threaten to
total annual volume of imports of an agricultural product to
substantially cause, serious injury to the domestic industry. In the
the corresponding total volume of domestic consumption of
process of conducting a preliminary determination, the Secretary
the said product in the country in the three (3) immediately
shall notify the interested parties and shall require them to submit
preceding years for which data are available;
their answers within five (5) working days from receipt of such
Minimum Access Volume (MAV) is the amount of imports of an
notice. The notice shall be deemed received five (5) working days
agricultural product allowed to be imported into the country at
from the date of transmittal to the respondent or appropriate
a customs duty lower than the out-quota customs duty;
diplomatic representative of the country of exportation or origin of
Positive adjustment to import competition shall refer to the
the imported product under consideration.
ability of the domestic industry to compete successfully with
When information is not applied within the above time limit set
imports after the termination of any safeguard measure, or to
by the Secretary or if the investigation is significantly impeded,
the orderly transfer of resources to other productive pursuits;
decision will be based on the facts derived from the evidence at
and to the orderly transition of dislocated workers in the
hand.
industry to other productive pursuits;
Upon a positive preliminary determination that increased
Price difference is the amount obtained after subtracting the c.i.f.
importation of the product under consideration is a substantial
import price from the trigger price;
cause of, or threatens to substantially cause, serious injury to the
Serious injury shall mean a significant impairment in the position
domestic industry, the Secretary shall, without delay, transmit its
of a domestic industry after evaluation by competent
records to the Commission for immediate formal investigation.
authorities of all relevant factors of an objective and
SEC. 8. Provisional Measures - In critical circumstances where a
quantifiable nature having a bearing on the situation of the
delay would cause damage which would be difficult to repair, and
industry concerned, in particular, the rate and amount of the
pursuant to a preliminary determination that increased imports are
increase in imports of the product concerned in absolute and
a substantial cause of, or threaten to substantially cause, serious
relative terms, the share of the domestic market taken by
injury to the domestic industry, the Secretary shall immediately
increased imports, changes in levels of sales, production,
issue, through the Secretary of Finance, a written instruction to the
productivity, capacity utilization, profit and losses, and
Commissioner of Customs authorizing the imposition of a
employment;
provisional general safeguard measure.
Substantial cause means a cause which is important but not less
Such measure shall take the form of a tariff increase, either ad
than any other cause;
valorem or specific, or both, to be paid through a cash bond set at a
Threat of serious injury shall be understood to mean serious
level sufficient to redress or prevent injury to the domestic
injury that is imminent;
industry: Provided, however, That in the case of agricultural
Trigger price is the price benchmark for applying the special
products where the tariff increase may not be sufficient to redress
safeguard measure; and
or to prevent serious injury to the domestic producer or producers,
Trigger volume is the volume benchmark for applying the special
a quantitative restriction may be set. The cash bond shall be
safeguard measure.
deposited with a government depository bank and shall be held in
CHAPTER II: GENERAL SAFEGUARD MEASURE trust for the importer who posted the bond.
SEC. 5. Conditions for the Application of General Safeguard The duration of the provisional measure shall not exceed two
Measures - The Secretary shall apply a general safeguard measure hundred (200) days from the date of imposition during which period
upon a positive final determination of the Commission that a the requirements of the subsequent sections of this Act on the
product is being imported into the country in increased quantities, initiation of a formal investigation, notification and consultation
whether absolute or relative to the domestic production, as to be a shall have been met: Provided, That the duration of any provisional
substantial cause of serious injury or threat thereof to the domestic measure shall be counted as part of the initial period and any
industry; however, in the case of non-agricultural products, the extension of the imposition of the definitive final safeguard
Secretary shall first establish that the application of such safeguard measure.
measures will be in the public interest. When the provisional safeguard measure is in the form of a tariff
SEC. 6. Initiation of Action Involving General Safeguard Measure - increase, such increase shall not be subject or limited to the
Any person, whether natural or juridical, belonging to or maximum levels of tariff as set forth in Section 401 (a) of the Tariff
representing a domestic industry may file with the Secretary a and Customs Code of the Philippines.
verified petition requesting that action be taken to remedy the SEC. 9. Formal Investigation - Within five (5) working days from
serious injury or prevent the threat thereof to the domestic industry receipt of the request from the Secretary, the Commission shall
caused by increased imports of the product under consideration. publish the notice of the commencement of the investigation and
public hearings which shall afford interested parties and consumers
an opportunity to be present, or to present evidence, to respond to
the presentation of other parties and consumers, and otherwise be where the benefiting industry fails to show any improvement, as
heard. Evidence and positions with respect to the importation of the may be determined by the Secretary.
subject article shall be submitted to the Commission within fifteen The Secretary shall issue a written instruction to the heads of the
(15) days after the initiation of the investigation by the Commission. concerned government agencies to implement the appropriate
The Commission shall complete its investigation and submit its general safeguard measure as determined by the Secretary within
report to the Secretary within one hundred twenty (120) calendar fifteen (15) days from receipt of the report.
days from receipt of the referral by the Secretary, except when the In the event of a negative final determination, or if the cash bond
Secretary certifies that the same is urgent, in which case the is in excess of the definitive safeguard duty assessed, the Secretary
Commission shall complete the investigation and submit the report shall immediately issue, through the Secretary of Finance, a written
to the Secretary within sixty (60) days. instruction to the Commissioner of Customs, authorizing the return
SEC. 11. Adjustment Plan - In the course of its investigation, the of the cash bond or the remainder thereof, as the case may be,
Commission shall issue appropriate notice to representatives of the previously collected as provisional general safeguard measure
concerned domestic industry or other parties, to submit an within ten (10) days from the date a final decision has been
adjustment plan to import competition, within forty-five (45) days made: Provided, That the government shall not be liable for any
upon receipt of the notice, except when the Secretary certifies that interest on the amount to be returned. The Secretary shall not
the same is urgent, in which case the adjustment plan must be accept for consideration another petition from the same industry,
submitted within thirty (30) days. with respect to the same imports of the product under
If the Commission makes an affirmative determination of injury or consideration within one (1) year after the date of rendering such a
threat thereof, individual commitments regarding actions such decision.
persons and entities intend to take to facilitate positive adjustment When the definitive safeguard measure is in the form of a tariff
to import competition shall be submitted to the Commission by any increase, such increase shall not be subject or limited to the
(a) firm in the domestic industry, (b) certified or recognized union or maximum levels of tariff as set forth in Section 401 (a) of the Tariff
group of workers in the domestic industry, (c) local community, (d) and Customs Code of the Philippines.
trade association representing the domestic industry or (e) other SEC. 14. Contents of the Report by the Commission - Based on its
person or group of persons. findings, the Commission shall submit to the Secretary:
SEC. 12. Determination of Serious Injury or Threat Thereof - In (a) the investigation report;
reaching a positive determination that the increase in the (b) the proposed recommendations;
importation of the product under consideration is causing serious (c) a copy of the submitted adjustment plan; and
injury or threat thereof to a domestic industry producing like (d) the commitments made by the domestic industry to
products or directly competitive products, all relevant factors having facilitate positive adjustment to import competition.
a bearing on the situation of the domestic industry shall be The report shall also include a description of the short and
evaluated. These shall include, in particular, the rate and amount of long-term effects of the affirmative or negative recommendation, as
the increase in imports of the products concerned in absolute and the case may be, on the petitioner, the domestic industries, the
relative terms, the share of the domestic market taken by the consumers, the workers, and the communities where production
increased imports, and changes in the level of sales, production, facilities of such industry are located.
productivity, capacity utilization, profits and losses, & employment. The Commission, after submitting the report to the Secretary,
Such positive determination shall not be made unless the shall make it available to the public except confidential information
investigation demonstrates, on the basis of objective evidence, the obtained under Section 10 and publish a summary in two (2)
existence of the causal link between the increased imports of the newspapers of general circulation.
product under consideration and serious injury or threat thereof to SEC. 15. Limitations on Actions - The duration of the period of an
the domestic industry. When factors other than increased imports action taken under the General Safeguard Provisions of this Act shall
are causing injury, such injury shall not be attributed to increased not exceed four (4) years. Such period shall include the period, if any,
imports. in which provisional safeguard relief under Section 8 was in effect.
SEC. 13. Adoption of Definitive Measures - Upon its positive The effective period of any safeguard measure, including any
determination, the Commission shall recommend to the Secretary extensions thereof under Section 19 may not, in the aggregate,
an appropriate definitive measure, in the form of: exceed ten (10) years.
(a) An increase in, or imposition of, any duty on the imported 1. Any additional duty, or any duty imposed under this Section
product; may be specific and/or ad valorem. It shall be in the amount
(b) A decrease in or the imposition of a tariff-rate quota (MAV) necessary to prevent or redress or remedy the injury to the
on the product; domestic industry;
(c) A modification or imposition of any quantitative restriction 2. If a quantitative restriction is used, such measure shall not
on the importation of the product into the Philippines; reduce the quantity of imports below the level of a recent period
(d) One or more appropriate adjustment measures, including which shall be the average of imports in the last three (3)
the provision of trade adjustment assistance; and representative years for which statistics are available, unless clear
(e) Any combination of actions described in subparagraphs justification is given that a different level is necessary to prevent or
(a)to(d) remedy serious injury;
The Commission may also recommend other actions, including 3. An action described in Section 13 (a), (b), or (c) that has an
the initiation of international negotiations to address the underlying effective period of more than one (1) year shall be phased down at
cause of the increase of imports of the product, to alleviate the regular intervals within the period in which the action is in effect;
injury or threat thereof to the domestic industry, and to facilitate and
positive adjustment to import competition. 4. Within two (2) years after the expiration of the action, the
The general safeguard measure shall be limited to the extent of Secretary shall not accept any further petition for the same
redressing or preventing the injury and to facilitate adjustment by article: Provided, however, That a safeguard measure with a
the domestic industry from the adverse effects directly attributed to duration of one hundred eighty (180) days or less may be applied
the increased imports: Provided, however, That when quantitative again to the same product if:
import restrictions are used, such measures shall not reduce the 1. At least one (1) year has elapsed since the date of
quantity of imports below the average imports for the three (3) introduction of the safeguard measure; and
preceding representative years, unless clear justification is given that 2. Such measure has not been applied on the same product
a different level is necessary to prevent or remedy a serious injury. more than twice in the five (5) year period immediately
A general safeguard measure shall not be applied to a product preceding the date of introduction of the measure.
originating from a developing country if its share of total imports of SEC. 16. Monitoring - So long as any action taken under Section 13
the product is less than three percent (3%): Provided, however, That remains in effect, the Commission shall monitor developments with
developing countries with less than three percent (3%) share respect to the domestic industry, including the progress and specific
collectively account for not more than nine percent (9%) of the total efforts made by workers and firms in the domestic industry to make
imports. a positive adjustment to import competition.
The decision imposing a general safeguard measure, the duration If the initial application of action taken under Section 13 exceeds
of which is more than one (1) year, shall be reviewed at regular three (3) years, or if an extension of such action exceeds three (3)
intervals for purposes of liberalizing or reducing its intensity. The years, the Commission shall submit to the Secretary a report on the
industry benefiting from the application of a general safeguard results of the monitoring, not later than the date which is the
measure shall be required to show positive adjustment within the midpoint of the initial period, and of each such extension, during
allowable period. A general safeguard measure shall be terminated which the action is in effect.
 The Commission, in the preparation of each monitoring report, duty subject to the conditions set in Section 21 of this Act. The
shall conduct a hearing at which interested parties shall be given request shall include data which would show that the volume of
reasonable opportunity to be present, to present evidence, and to imports of a particular product has exceeded its trigger volume or
be heard. that the c.i.f. import price of a particular product has gone below its
SEC. 17. Notice of General Safeguard Measure - The Secretary shall trigger price. The Secretary shall come up with a finding within five
notify the concerned Committee on Safeguards of the World Trade (5) working days from the receipt of a request.
Organization: The Secretary may, motu proprio, initiate the imposition of a
(a) When initiating an action relating to serious injury or threat special safeguard measure following the satisfaction of the
thereof and the reasons for it; conditions for imposing the measure set in this Chapter.
(b) When adopting a provisional general safeguard measure SEC. 23. Determination of Special Duty Based on the Volume Test
following a positive preliminary determination; and - The special safeguard duty allowed to be imposed on the basis of
(c) When applying or extending a definitive general safeguard the volume test pursuant to Section 21 (a) of this Act shall be
measure following a positive final determination. determined as follows:
SEC. 18. Reduction, Modification, and Termination of Action - (a) The trigger volume referred to in Section 21 (a) of this Act is
Action taken under Section 13 may be reduced, modified, or the amount obtained, after adding the change in the annual
terminated by the Secretary only after: domestic consumption of the agricultural product under
(a) Taking into account the results of the monitoring indicated in the consideration, for the two (2) preceding years for which data are
report submitted by the Commission under Secction 16, he available, to:
determines that: • One hundred twenty-five percent (125%) of the average
a. No adequate efforts to make a positive adjustment to import annual volume of imports of the agricultural product under
competition have been undertaken by the domestic industry; consideration in the three (3) immediately preceding years for
and which data are available, hereinafter referred to as the
b. Changed economic circumstances have impaired the average import volume, if the market access opportunity is at
effectiveness of action taken under Section 13. most ten percent (10%); or
(b) A majority of the representatives of the domestic industry • One hundred ten percent (110%) of the average annual
submits to the Secretary, at least one (1) year before the expiration, import volume, if the market access opportunity exceeds ten
a petition requesting such reduction, modification, or termination on percent (10%) but is not more than thirty percent (30%); or
the basis that the domestic industry has made a positive adjustment • One hundred five percent (105%) of the average annual
to import competition. import volume, if the market access opportunity exceeds
If reduction, modification, or termination of action is being thirty percent (30%):
requested for an action that has been in effect for three (3) years or The special safeguard duty allowed to be imposed on the basis of
less, the petitioning industry shall submit its request to the Secretary. the volume test pursuant to Section 21 (a) of this Act shall be
The Secretary shall refer the request to the Commission which shall determined as follows:
conduct an investigation following the procedures under Section 9, (a) The trigger volume referred to in Section 21 (a) of this Act is
to be completed within sixty (60) days from receipt of the request. the amount obtained, after adding the change in the annual
The Commission shall submit a report to the Secretary who shall domestic consumption of the agricultural product under
then take action after taking into consideration conditions under consideration, for the two (2) preceding years for which data
Section 16 (1) and (2), not later than thirty (30) days after receipt of are available, to:
the Commission's report. Provided, That if the change in the volume of domestic
SEC. 19. Extension and Re-application of Safeguard Measure - consumption mentioned above is not taken into account in
Subject to the review under Section 16, an extension of the measure computing the trigger volume, the trigger volume shall be equal to
may be requested by the petitioner if the action continues to be one hundred twenty-five percent (125%) of the average import
necessary to prevent or remedy the serious injury and there is volume for the immediate three (3) preceding years for which data
evidence that the domestic industry is making positive adjustment are available, unless a clear justification is given that a different level
to import competition. is necessary to prevent or remedy serious injury: Provided,
The petitioner may appeal to the Secretary at least ninety (90) further, That the trigger volume shall at least be one hundred five
days before the expiration of the measure for an extension of the percent (105%) of the average imports of the agricultural product
period by stating concrete reasons for the need thereof and a under consideration.
description of the industry's adjustment performance and future The special safeguard duty allowed to be imposed on the basis of
plan. The Secretary shall immediately refer the request to the the volume test pursuant to Section 21 (a) of this Act shall be
Commission. determined as follows:
Following the procedures required under Section 9, the (b) The special safeguard duty to be imposed subject to the
Commission shall then submit a report to the Secretary not later conditions stated under the volume test shall be appropriately
than sixty (60) days from its receipt of the request. Within seven (7) set to a level not exceeding one-third of the applicable
days from receipt of the report, the Secretary shall issue an order out-quota customs duty on the agricultural product under
granting or denying the petition. In case an extension is granted, the consideration in the year when it is imposed: Provided, That
same shall be more liberal than the initial application. this duty shall only be maintained until the end of the year in
SEC. 20. Evaluation of Effectiveness of Action - After termination of which it is imposed: Provided, further, That this duty may be
any action under Section 13, the Commission shall evaluate the reduced or terminated in special cases such as when a
effectiveness of the actions taken by the domestic industry in shortage of a particular agricultural product exists, as
facilitating positive adjustment to import competition. determined by the Secretary.
The Commission shall hold a public hearing on the effectiveness (c) In transitu volumes of imports of the agricultural product
of the action at which all interested parties shall be afforded under consideration at the time the special safeguard duty is
opportunity to present evidence or testimony. imposed shall be exempted from the additional duty. However,
such volumes shall be counted in the computation of the
CHAPTER III: SPECIAL SAFEGUARD MEASURE FOR
cumulative volume of imports of the said agricultural product
AGRICULTURAL PRODUCTS
for the following year.
SEC. 21. Authority to Impose the Special Safeguard Measure - The
SEC. 24. Determination of Special Safeguard Duty Based on the
Secretary of Agriculture shall issue a department order requesting
Price Test - The additional duty allowed to be imposed on the basis
the Commissioner of Customs, through the Secretary of Finance, to
of the price test pursuant to Section 21 (b) of this Act shall be
impose an additional special safeguard duty on an agricultural
determined as follows:
product, consistent with Philippine international treaty obligations,
(a) The trigger price referred to in Section 21 (b) of this Act is the
if:
average actual c.i.f. import price or relevant reference price of the
(a) Its cumulative import volume in a given year exceeds its
agricultural product under consideration from 1986 to 1988, unless
trigger volume, subject to the conditions stated in this Act, in Section
clear justification is given that a different reference price is
23 below; or but not concurrently; and
necessary to prevent or remedy serious injury. The Secretary shall
(b) Its actual c.i.f. import price is less than its trigger price subject
publish the list of trigger prices corresponding to each of the
to the conditions stated in this Act, in Section 24 below.
agricultural products covered by this Act, after the conduct of public
SEC. 22. Initiation of Action Involving Special Safeguard Measure -
hearings on the subject; &
Any person, whether natural or juridical, may request the Secretary
to verify if a particular product can be imposed a special safeguard
 (b) The special safeguard duty to be imposed subject to the disqualification from holding public office.
conditions stated under Section 21 (b) of this Act shall be computed SEC. 31. Prohibition of Concurrent Recourse to Safeguard
as follows: Measures - There shall be no recourse to the use of the general
1. Zero, if the price difference is at most ten percent (10%) of safeguard measure under Chapter II of this Act concurrently with
the trigger price; or the special safeguard measure as provided for under Chapter III of
2. Thirty percent (30%) of the amount by which the price this Act and vice-versa.
difference exceeds ten percent (10%) of the trigger price, if the SEC. 32. Issuance of Implementing Rules and Regulations - Within
said difference exceeds ten percent (10%) but is at most forty sixty (60) days after the effectivity of this Act, the Department of
percent (40%) of the trigger price; or Agriculture and the Department of Trade and Industry in
3. Fifty percent (50%) of the amount by which the price consultation with the Department of Finance, the Bureau of
difference exceeds forty percent (40%) of the trigger price, Customs, the National Economic and Development Authority, and
plus the additional duty imposed under Section 24 (b) (ii), if the the Tariff Commission, after consultations with domestic industries
said difference exceeds forty percent (40%) but is at most sixty and with the approval of the Congressional Oversight Committee
percent (60%) of the trigger price; or which is hereby created under this Act, shall promulgate the
4. Seventy percent (70%) of the amount by which the price necessary rules and regulations to implement this Act.
difference exceeds sixty percent (60%) of the trigger price, plus SEC. 33. Oversight - There shall be a Congressional Oversight
the additional duties imposed under Section 24 (b)(ii) and Committee composed of the Chairmen of the Committee on Trade
(b)(iii), if the said difference exceeds sixty percent (60%) and is and Industry, the Committee on Ways and Means, and the
at most seventy-five percent (75%) of the trigger price; or Committee on Agriculture of both the Senate and the House of
5. Ninety percent (90%) of the amount by which the price Representatives to oversee the implementation of this Act.
difference exceeds seventy-five percent (75%) of the trigger SEC. 34. Administrative System Support - Upon the effectivity of
price; plus the additional duties imposed under Section 24 this Act, any sum as may be necessary for the Department of
(b)(ii), (b)(iii), and (b)(iv), if the said difference exceeds Agriculture, the Department of Trade and Industry, and the Tariff
seventy-five percent (75%) of the trigger price. Commission to undertake their functions efficiently and effectively
As far as practicable, a special safeguard measure determined shall be included in the General Appropriations Act.
under the provisions of this Section shall not be resorted to when The aforementioned government agencies are hereby authorized
the volume of the imported agricultural product under consideration to collect such fees, charges, and safeguard duties that are deemed
is declining. necessary. Fifty percent (50%) of the revenue collected from such
SEC. 25. Agricultural Products Subject to Minimum Access Volume fees, charges, and safeguard duties shall be set aside in a Remedies
Commitments - The special safeguard duty shall not apply to the Fund which shall be earmarked for the use of these agencies in the
volumes of the imported agricultural product under consideration implementation of remedies, including the safeguard measures. The
that are brought into the country under the minimum access volume remaining fifty percent (50%) shall be deposited under a special
mechanism: Provided, however, That these volumes shall be account to be created in the National Treasury and shall be
included in computing the cumulative volume of imports of the said earmarked for competitiveness enhancement measures for the
agricultural product pursuant to Section 21 (a) of this Act. industries affected by the increased imports. The disposition thereof
SEC. 26. Perishable and Seasonal Agricultural Products - Shorter shall be determined through the General Appropriations Act.
time periods and different reference prices may be used in SEC. 35. Assistance to Farmers and Fisherfolk - To safeguard and
determining the applicable special safeguard measure taking into enhance the interest of farmers and fisherfolk, nothing in this Act
account the special characteristics of perishable and seasonal shall in any manner affect the provisions of Republic Act No. 8435,
agricultural imports. otherwise known as the Agriculture and Fisheries Modernization Act.
SEC. 27. Notice of Special Safeguard Measure - The Secretary shall SEC. 36. Conditions for Application of Safeguard Measures - In the
make the administration of the safeguard measure transparent by application of any safeguard measure under this Act, the following
giving notice in writing to the WTO Committee on Agriculture, in conditions must be observed:
advance to the extent practicable, but in any event within ten (10) 1. All actions must be transparent and shall not allow any
days from the implementation of such measure: Provided, anti-competitive, monopolistic or manipulative business
however, That for perishable and seasonal agricultural products, devise; and
notification shall be made from the first action in any period. 2. Pursuant to the non-impairment clause of the Constitution,
The notice shall include relevant data or as may be deemed nothing in this Act shall impair the obligation of existing supply
necessary, information and methods used in cases where changes in contracts.
consumption volumes must be allocated to individual tariff lines
subject to action under Chapter III of this Act.
Where a special safeguard measure action is taken under the
provisions of this Act, the Secretary shall consult with interested
WTO members and provide all relevant information on the
conditions of the application of such action.
SEC. 28. Duration of Special Safeguard Measures - The special
safeguard measures for agricultural products shall lapse with the
duration of the reform process in agriculture as determined in the
WTO. Thereafter, recourse to safeguard measures shall be subject to
the provisions on general safeguard measures as provided in
Chapter II of this Act.
CHAPTER IV: SPECIAL PROVISIONS
SEC. 29. Judicial Review - Any interested party who is adversely
affected by the ruling of the Secretary in connection with the
imposition of a safeguard measure may file with the Court of Tax
Appeals, a petition for review of such ruling within thirty (30) days
from receipt thereof: Provided, however, That the filing of such
petition for review shall not in any way stop, suspend or otherwise
toll the imposition or collection of the appropriate tariff duties or
the adoption of other appropriate safeguard measures, as the case
may be.
The petition for review shall comply with the same requirements
and shall follow the same rules of procedure and shall be subject to
the same disposition as in appeals in connection with adverse rulings
on tax matters to the Court of Appeals.
SEC. 30. Penalty Clause - Any government official or employee who
shall fail to initiate, investigate, and implement the necessary
actions as provided in this Act and the rules and regulations to be
issued pursuant hereto, shall be guilty of gross neglect of duty and
shall suffer the penalty of dismissal from public service and absolute
 [TARIFF6] COUNTERVAILING MEASURES Are all subsidies countervailable?
- Not all subsidies are countervailable/actionable. Subsidy, in order
• REPUBLIC ACT NO. 8751 - an act strenghtening the mechanisms
to be countervailable, must be "specific;" i.e., explicitly limited to:
for the imposition of countervailing duties on imported subsidized
* An enterprise or group of enterprises;
products, commodities or articles of commerce in order to protect
* An industry sector or group of industries; and
domestic industries from unfair trade competition, amending for the
* A designated geographic region within the jurisdiction of the
purpose section 302, part 2, title ii, book i of presidential decree no.
granting authority.
1464, otherwise known as the tariff and customs code of the
- "Actionable subsidies" or "yellow subsidies" are those falling under
philippines, as amended.
the definition of "subsidy" which are neither non-actionable nor
Section 1 - Section 302, Part 2, Title II, Book 1 of Presidential Decree prohibited subsidies.
No. 1464, otherwise known as the Tariff and Customs Code of the
What are Non-actionable and Prohibited subsidies?
Philippines, as amended,
• Non-actionable subsidies or green subsidies are those which are
SEC. 302. Countervailing Duty - "Whenever any product, commodity permitted as they are of a general nature, i.e., applied
or article of commerce is granted directly or indirectly by the across-the-board to all industries and not limited to a specific
government in the country or origin or exportation, any kind or form industry or enterprise or group of enterprises or industries. Subsidy,
of specific subsidy upon the production, manufacture or exportation under this category, cannot be subjected to either countervailing
of such product, commodity or article, and the importation of such measures or other disciplines under the Agreement.
subsidized product, commodity or article has caused or threatens to Examples:
cause material injury to a domestic industry or has materially * For research activities conducted by firms;
retarded the growth or prevents the establishment of a domestic * To adapt existing production facilities to new environmental
industry as determined by the Tariff Commission. requirements; and
The Secretary of Trade and Industry, in the case of nonagricultural * To assist in the development of industries in disadvantaged
product, commodity or article, or the Secretary of Agriculture, in the regions, provided that such assistance is not directed to specific
case of agricultural product, commodity or article shall issue a enterprises or industries within the region.
department order imposing a countervailing duty equal to the • Prohibited subsidies or red subsidies, on the other hand, include
ascertained amount of the subsidy. The same levy shall be imposed export subsidies, i.e., those that are contingent on export
on the like product, commodity or article thereafter imported to the performance, and subsidies that are contingent on the use of
Philippines under similar circumstances. The countervailing duty domestic over imported goods. An importing country alleging this
shall be in addition to any ordinary duties, taxes and charges kind of subsidy can avail of remedy measures by bringing the matter
imposed by law on such imported product, commodity or article. before the WTO Dispute Settlement Body for redress.
Examples:
What Is a Subsidy? * Direct subsidies based on export performance;
- "Subsidy" refers to any specific assistance (e.g. financial * Currency retention schemes involving a bonus on exports;
contribution, income or price support schemes) directly or indirectly * Provision of subsidized inputs for use in the production of
provided by the government of the country of export or origin in exported goods;
respect of the product imported into the Philippines. * Exemption from direct taxes (e.g., tax on profits related to
- An industry is deemed to have received subsidy where a benefit is exports);
conferred as a result of: * Exemption from, or remission of, indirect taxes (e.g., VAT) on
* Direct and/or potential transfer of government funds (e.g., exported products in excess of those borne by these products
when sold for domestic consumption;
grants, loans, equity infusion, loan guarantees);
* Remission or drawback of import charges (e.g., tariffs and other
* The government foregoing the revenue that should
duties) in excess of those levied on inputs consumed in the
otherwise have been collected (e.g., tax credits); and
production of exported goods;
* The government providing goods or services, or purchasing * Export guarantee programs at premium rates inadequate to
goods. cover the long-term costs of the program; and
Types of Subsidies * Export credits at rates below the government’s cost of borrowing,
• DIRECT SUBSIDIES - Direct subsidies are those that involve an where they are used to secure a material advantage in export
actual payment of funds toward a particular individual, group, or credit terms.
industry. What are the elements or factors to be considered before a
• INDIRECT SUBSIDIES - Indirect subsidies are those that do not hold countervailing duty may be imposed?
a predetermined monetary value or involve actual cash outlays. - There are four (4) elements or factors which must be considered
They can include activities such as price reductions for required before a countervailing duty may be imposed, namely:
goods or services that can be government-supported. This allows the 1. Product Comparability – a product is identical or alike in all
needed items to be purchased below the current market rate, respects to the article under consideration or, in absence of such
resulting in savings for those whom the subsidy is designed to help. product, another product which, although not alike in all respects,
• GOVERNMENT SUBSIDIES - There are many forms of subsidies has characteristics closely resembling those of the product under
given out by the government. Two of the most common types of consideration.
individual subsidies are welfare payments and unemployment 2. Subsidy – refers to any specific assistance directly or indirectly
benefits. The objective of these types of subsidies is to help people provided by the government of the country of export or origin in
who are temporarily suffering economically. Other subsidies, such as respect of a product imported into the Philippines.
subsidized interest rates on student loans, are given to encourage 3. Injury – means material injury to a domestic industry, threat of
people to further their education. material injury or material retardation of the growth or the
What is a countervailing duty? prevention of the establishment of a domestic industry. Injury test
- A "countervailing duty" is a special duty levied, in addition to the must be based on positive evidence and shall involve an objective
regular duty and other charges, by an importing country on its examination of both (a) the volume of the subsidized imports and
imports which have been found to be subsidized in the country of the effect of subsidized imports on the prices of like product in the
origin or exportation. It is equal to the ascertained amount of domestic market, and (b) the consequent impact of these imports
subsidy, calculated in terms of subsidy per unit of the subsidized on domestic producers of such products.
exported product. It is imposed following an affirmative final 4. Causal Link – the material injury suffered by the domestic
determination. industry is the direct result of the importation of the subsidized
product.
What is a countervailing bond?
- A "countervailing bond" is a security (cash deposit or bond) equal A. Initiation of Action
to the amount of the provisionally calculated amount of subsidy. It is Countervailing action may be initiated by the following:
required to be posted when the investigating authorities find that (1) Any person, whether natural or juridical, who has an interest
such measure is necessary to prevent injury being caused during the to protect, by filing a verified petition for the imposition of a
course of the investigation. countervailing duty by or on behalf of the domestic industry;
(2) The Secretary of Trade and Industry or the Secretary of
Agriculture, as the case may be, in special circumstances where
 there is sufficient evidence of an existence of a subsidy, injury and government of the exporting country about the impending
causal link. investigation.
B. Requirements E. Preliminary Determination
- A petition shall be filed with the Secretary and shall be - Within twenty (20) days from his receipt of the answer of the
accompanied by documents, if any, which are reasonably available interested parties, the Secretary shall, on the basis of the petition of
to the petitioner and which contain information supporting the facts the aggrieved party and the answer of such interested parties and
that are essential to establish the presence of the elements for the their respective supporting documents or information, make a
imposition of a countervailing duty, and shall further state, among preliminary determination on whether or not a prima facie case
others: exists for the imposition of a provisional countervailing duty in the
(1) The domestic industry to which the petitioner belongs and form of a cash bond equal to the provisionally estimated amount of
the particular domestic product, commodity or article or class of subsidy. Upon finding of a prima facie case, the Secretary shall
domestic product, commodity or article being prejudiced; immediately issue, through the Secretary of Finance, a written
(2) The number of persons employed, the total capital invested, instruction to the Commissioner of Customs to collect the cash bond,
the production and sales volume, and the aggregate production in addition to the corresponding ordinary duties, taxes and other
capacity of the domestic industry that has been materially injured charges imposed by law on such product, commodity or article. The
or is threatened to be materially injured or whose growth or posting of a cash bond shall be required not earlier than sixty (60)
establishment has been materially retarded or prevented; days from the date of initiation of the investigation. The cash bond
(3) The name and address of the known importer, exporter, or shall be deposited with a government depository bank and shall be
foreign producer, the country of origin or export, the estimated held in trust for the respondent importer. The application of the
aggregate or cumulative quantity, the port and the date of arrival, cash bond shall not exceed four (4) months.
the import entry declaration of the imported product, commodity - The Secretary shall immediately transmit his preliminary findings
or article, as well as the nature, the extent and the estimated together with the records of the case to the Commission for its
amount of the subsidy thereon; and formal investigation.
(4) Such other particulars, facts or allegations as are necessary to
F. Termination of Investigation by the Secretary or the Commission
justify the imposition of countervailing duty on the imported
- The Secretary or the Commission as the case may be, shall motu
product, commodity or article.
proprio terminate the investigation at any stage of the proceedings
- A petition for the imposition of a countervailing duty shall be
if the amount of subsidy is de minimis as defined in existing
considered to have been made 'by or on behalf of the domestic
international trade agreements of which the Republic of the
industry' if it is supported by those domestic producers whose
Philippines is a party; or where the volume of the subsidized
collective output constitutes more than fifty percent (50%) of the
imported product, commodity or article, actual or potential, or the
total production of the like product produced by that portion of the
injury is negligible.
domestic industry expressing either support for or opposition to the
application. However, an investigation shall be initiated only when G. Formal Investigation by the Commission
domestic producers supporting the application account for at least - Immediately upon its receipt of the records of the case from the
twenty-five percent (25%) of the total production of the like product Secretary, the Commission shall commence the formal investigation
produced by the domestic industry. In cases involving an and shall accordingly notify in writing all interested parties and, in
exceptionally large number of producers, degree of support or addition, give public notice of such investigation in two (2)
opposition may be determined by using statistically valid sampling newspapers of general circulation.
techniques or by consulting their representative organizations. - In the formal investigation, the Commission shall essentially
- Within ten (10) days from his receipt of the petition or information, determine:
the Secretary shall review the accuracy and adequacy of the (1) The nature and amount of the specific subsidy being enjoyed
information or evidence provided in the petition to determine by the imported product, commodity or article in question;
whether there is sufficient basis to justify the initiation of an (2) The presence and extent of the material injury or the threat
investigation. If there is no sufficient basis to justify the initiation of thereof to, or the material retardation of the growth, or the
an investigation, the Secretary shall dismiss the petition and shall prevention of the establishment of, the affected domestic
properly notify the Secretary of Finance, the Commissioner of industry; and
Customs and other parties concerned regarding such dismissal. The (3) The existence of a causal relationship between the allegedly
Secretary shall extend legal, technical and other assistance to the subsidized imported product, commodity or article and the
concerned domestic producers and their organizations at all stages material injury or threat thereof to, or the material retardation of
of the countervailing action. the growth, or the prevention of the establishment of, the
affected domestic industry.
C. Notice to the Secretary of Finance
- The Commission is hereby authorized to require any interested
- Upon his receipt of the petition, the Secretary shall, without delay,
party to allow it access to, or otherwise provide, necessary
furnish the Secretary of Finance with a summary of the essential
information to enable the Commission to expedite the investigation.
facts of the petition, and request the latter to immediately inform
In case any interested party refuses access to, or otherwise does not
the Commissioner of Customs regarding such petition and to instruct
provide, necessary information within a reasonable period of time
him to gather and secure all import entries covering such allegedly
or significantly impedes the investigation, a final determination shall
subsidized product, commodity or article without liquidation. The
be made on the basis of the facts available.
Commissioner of Customs shall submit to the Secretary a complete
- The formal investigation shall be conducted in a summary manner.
report on the number, volume, and value of the importation of the
No dilatory tactics nor unnecessary or unjustified delays shall be
allegedly subsidized product, commodity or article within ten (10)
allowed, and the technical rules of evidence shall not be applied
days from his receipt of the instruction from the Secretary of
strictly.
Finance, and to make similar additional reports every ten (10) days
thereafter. H. Determination of the Existence of Subsidy
- A subsidy is deemed to exist:
D. Notice to and Answer of Interested Parties
(1) When the government or any public body in the country or
- Within five (5) days from finding of the basis to initiate an
origin or export of the imported product, commodity or article
investigation, the Secretary shall notify all interested parties, and
extends financial contribution to the producer, manufacturer or
shall furnish them with a copy of the petition and its annexes, if any.
exporter of such product, commodity or article in the form of:
The interested parties shall, not later than thirty (30) days from their
(a) Direct transfer of funds such as grants, loans or equity
receipt of the notice, submit their answer, including such relevant
infusion; or
evidence or information as is reasonably available to them to
(b) Potential direct transfer of funds or assumption of liabilities
controvert the allegations of the petition. If they fail to submit their
such as loan guarantees; or
answer, the Secretary shall make such preliminary determination of
(c) Foregone or uncollected government revenue that is
the case on the basis of the facts and/or information available.
otherwise due from the producer, manufacturer or exporter of
- The Secretary shall avoid, unless a decision has been made to
the product, commodity or article: Provided, That the
initiate an investigation, any publicizing of the petition. However,
exemption of any exported product, commodity or article from
after receipt of a properly documented petition and before
duty or tax imposed on like products, commodity or article
proceeding to initiate an investigation, he shall notify the
when destined for consumption in the country of origin and/
 or export or the refunding of such duty or tax, shall not be competition between the foreign and domestic producers;
deemed to constitute a grant of a subsidy: Provided, further, developments in technology and the export performance and
That should a product, commodity or article be allowed productivity of the domestic industry.
drawback by the country of origin or export, only the - In determining threat of material injury, the Secretary or the
ascertained or estimated amount by which the total amount of Commission, as the case may be, shall decide on the basis of facts
duties and/or internal revenue taxes was discounted or and not merely allegation, conjecture or remote possibility. The
reduced, if any, shall constitute a subsidy; or change in circumstances which would create a situation in which the
(d) Provision of goods or services other than general subsidized imports would cause injury should be clearly foreseen
infrastructure; or and imminent considering such relevant factors as:
(e) Purchases of goods from the producer, manufacturer or (1) Nature of the subsidy in question and the trade effects likely
exporter; or to arise therefrom;
(f) Payments to a funding mechanism; or (2) Significant rate of increase of subsidized imports into the
(g) Other financial contributions to a private body to carry out domestic market indicating the likelihood of substantially
one or more of the activities mentioned in subparagraphs (a) to increased importations;
(f) above; or (3) Sufficient freely disposable, or an imminent substantial
(h) Direct or indirect income or price support; and increase in, capacity of the exporter of such subsidized imported
(2) When there is a benefit conferred. product, commodity or article indicating the likelihood of
I. Determination of Specific Subsidy substantially increased subsidized imports to the domestic
- In the determination of whether or not a subsidy is specific, the market, taking into account the availability of other markets to
following principles shall apply: absorb the additional exports;
(1) Where the government or any public body in the country of (4) Whether these subsidized imports are entering at prices that
origin or export of the imported product, commodity or article will have a significant depressing or suppressing effect on
explicitly limits access to a subsidy to certain enterprises, such domestic prices, and will likely increase demand for further
subsidy shall be specific; imports; and
(2) Where such government or public body through a law or (5) Inventories of the product, commodity, or article being
regulation establishes objective criteria and conditions governing investigated.
the eligibility for, and the amount of, a subsidy, specificity shall - In the case where the effect of the subsidized import will
not exist: Provided, That the eligibility is automatic and that such materially retard the growth or prevent the establishment of a
criteria or conditions are strictly adhered to. Objective criteria domestic industry, information on employment, capital investment,
shall mean those which are neutral, do not favor certain production and sales, and production capacity of said domestic
enterprises over others, and are economic in nature and industry can be augmented or substituted by showing through a
horizontal in application, such as number of employees or size of factual study, report or other data that an industry which has
enterprise; potential to grow domestically is adversely affected by the
(3) In case a subsidy appears to be non-specific according to subsidized import. For this purpose, the Department of Trade and
subparagraphs (1) and (2) above, but there are reasons to believe Industry for non-agricultural products, and the Department of
that the subsidy may in fact be specific, factors that may be Agriculture for agricultural products, shall conduct continuing
considered are: use of a subsidy program by a limited number of studies to identify and determine the specific industries, whether
certain enterprises for a relatively longer period; granting of locally existing or not, which have the potential to grow or to be
disproportionately large amounts of subsidy to certain established domestically and whose growth or establishment will be
enterprises; and exercise of wide and unwarranted discretion for retarded or prevented by a subsidized import.
granting a subsidy; and K. Cumulation of Imports
(4) A subsidy which is limited to certain enterprises located within - When imports of products, commodities or articles from more
a designated geographical region within the territory of the than one (1) country are simultaneously the subject of an
government or public body in the country of origin or export shall investigation for the imposition of a countervailing duty, the
be specific. Secretary or the Commission, as the case may be, may cumulatively
J. Determination of Injury assess the effects of such imports only if:
- The presence and extent of material injury or threat thereof to a (1) The amount of subsidization established in relation to the
domestic industry, or the material retardation of the growth, or the imports from each country is more than de minimis as defined in
prevention of the establishment of a nascent enterprise because of existing international trade agreements of which the Republic of
the subsidized imports, shall be determined by the Secretary or the the Philippines is a party; and
Commission, as the case may be, on the basis of positive evidence (2) The volume of such imports from each country is not
and shall require an objective examination of: negligible; and
(1) The volume of the subsidized imports, that is, whether there (3) A cumulative assessment of the effects of such imports is
has been a significant increase either absolute or relative to warranted in the light of the conditions of competition between
production or consumption in the domestic market; the imported products, commodities or articles, and the
(2) The effect of the subsidized imports on prices in the domestic conditions of competition between the imported products,
market for the like product, commodity or article, that is, whether commodities or articles and the like domestic products,
there has been a significant price undercutting, or whether the commodities or articles.
effect of such imports is otherwise to depress prices to a L. Public Notices and Consultation Proceedings
significant degree or to prevent price increases, which otherwise - The Secretary or the Commission, as the case may be, shall make
would have occurred to a significant degree; public notices and conduct consultation with the government of the
(3) The effect of the subsidized imports on the domestic exporting country when:
producers of the like product, commodity or article, including an (1) Initiating an investigation;
evaluation of all relevant economic factors and indices having a (2) Concluding or suspending an investigation;
bearing on the state of the domestic industry concerned, such as, (3) Making a preliminary or final determination;
but not limited to, actual and potential decline in output, sales, (4) Making a decision to accept an undertaking or the termination
market share, profits, productivity, return on investments, or of an undertaking; and
utilization of capacity; factors affecting domestic prices; actual or (5) Terminating a definitive countervailing duty.
potential negative effects on the cash flow, inventories,
employment, wages, growth, ability to raise capital or M. Voluntary Undertaking
investments and, in the case of agriculture, whether there has - When there is an offer from any exporter of subsidized imports to
been an increased burden on the support programs of the revise its price, or where the government of the exporting country
national government; and agrees to eliminate or limit the subsidy or take other measures to
(4) Factors other than the subsidized imports which at the same that effect, the Commission shall determine if the offer is acceptable
time are injuring the domestic industry, such as volumes and and make the necessary recommendation to the Secretary. If the
prices of non-subsidized imports of the product, commodity or undertaking is accepted, the Secretary may advise the Commission
article in question; contraction in demand or changes in the to terminate, suspend or continue the investigation. The Secretary
patterns of consumption; trade restrictive practices of and may also advise the Commission to continue its investigation upon
the request of the government of the exporting country. The
voluntary undertaking shall lapse if there is a negative finding of the - The procedure and evidence governing the disposition of the
presence of a subsidy or material injury. In the event of a positive petition for the imposition of countervailing duty shall equally apply
finding of subsidization and material injury, the undertaking will to any review carried out under this subsection. Such review shall be
continue, consistent with its terms and the provisions of this section. carried out expeditiously and shall be concluded not later than
ninety (90) days from the date of the initiation of such a review.
N. Final Determination & Submission of Report by the Commission
- The Commission shall complete the formal investigation and THE LIFETIME OF EACH COUNTERVAILING MEASURE
submit a report of its findings to the Secretary within one hundred • Provisional countervailing duty – four (4) months
twenty (120) days from receipt of the records of the case: Provided, • Definitive countervailing duty – five (5) years from imposition
however, That it shall, before a final determination is made, inform
TWO REVIEWS
all the interested parties of the essential facts under consideration
1. Sunset review
which form the basis for the decision to impose a countervailing
- It is a review that may be initiated by any interested party or upon
duty. Such disclosure should take place in sufficient time for the
own motion of the Commission before the “sunset date”, i.e., the
parties to defend their interests.
5th year, to determine whether the expiry of the duration of the
O. Imposition of Countervailing Duty countervailing duty imposition would lead to a continuation or
- The Secretary shall, within ten (10) days from receipt of an recurrence of subsidization and injury.
affirmative final determination by the Commission, issue a 2. Interim review
department order imposing the countervailing duty on the - It is a review conducted by the Commission, motu proprio, or upon
subsidized imported product, commodity or article. He shall furnish the direction of the Secretary or upon petition of any interested
the Secretary of Finance with the copy of the order and request the party to determine whether:
latter to direct the Commissioner of Customs to cause the * the imposition of the countervailing duty is no longer necessary
countervailing duty to be levied, collected and paid, in addition to to offset subsidization, taking into consideration the need to
any other duties, taxes and charges imposed by law on such product, protect the existing domestic industry against dumping.
commodity or article. * the existing duty is not sufficient to counteract the
- In case of an affirmative final determination by the Commission, subsidization which is causing injury.
the cash bond shall be applied to the countervailing duty assessed. If - At least one (1) year should have elapsed since the imposition of
the cash bond is in excess of the countervailing duty assessed, the the countervailing duty before an interim review can be initiated.
remainder shall be returned to the importer immediately: Provided,
Q. Judicial Review
That no interest shall be payable by the government on the amount
- Any interested party who is adversely affected by the department
to be returned. If the cash bond is less than the countervailing duty
order of the Secretary on the imposition of the countervailing duty
assessed, the difference shall not be collected.
may file with the Court of Tax Appeals a petition for review of such
- If the order of the Secretary is unfavorable to the petitioner, the
order within thirty (30) days from his receipt of notice thereof:
Secretary shall, after the lapse of the period for appeal to the Court
Provided, however, That the filing of such petition for review shall
of Tax Appeals, issue through the Secretary of Finance a department
not in any way stop, suspend or otherwise toll the imposition and
order for the immediate release of the cash bond to the importer.
collection of the countervailing duty on the imported product,
TWO MEASURES commodity or article.
1. Provisional Measure - takes the form of a provisional duty in the - The petition for review shall comply with the same requirements,
form of a cash bond, in addition to any other duties, taxes and follow the same rules of procedure, and be subject to the same
charges imposed by law on the allegedly subsidized product. It is disposition as in appeals in connection with adverse rulings on tax
applied only after the DTI-BIS or DA has made a preliminary matters to the Court of Tax Appeals.
affirmative determination and no sooner than 60 days from the
initiation of the case. Section 2. Administrative Support - Upon the effectivity of this Act,
2. Definitive Duty - final countervailing duty imposed, in addition to the Departments of Trade and Industry and Agriculture and the
the regular duty and other charges, on a protested product imported Tariff Commission shall ensure the efficient and effective
from a specific exporter, following an affirmative final implementation of the provisions of this Act by creating a special
determination. unit within each agency that will undertake the functions relative to
the disposition of countervailing cases.
P. Duration and Review of Countervailing Duty
All countervailing duties collected shall be earmarked for the
- As a general rule, any imposition of countervailing duty shall
strengthening of the capability of the Departments of Trade and
remain in force only as long as and to the extent necessary to
Industry and Agriculture and the Tariff Commission to undertake
counteract a subsidization which is causing or threatening to cause
their responsibilities under this Act.
material injury. However, the need for the continued imposition of
Additional funding shall come from fees and charges which the
the countervailing duty may be reviewed by the Commission when
aforementioned government agencies are authorized to collect
warranted, motu proprio or upon direction of the Secretary.
under this Act.
- Any interested party may also petition the Secretary for a review of
the continued imposition of the countervailing duty: Provided, That Section 3. Separability Clause - If any of the provisions of this Act is
at least six (6) months have elapsed since the imposition of the declared invalid by a competent court, the remainder of this Act or
countervailing duty, and upon submission of positive information any provision not affected by such declaration of invalidity shall
substantiating the need for a review. Interested parties may request remain in force and effect.
the Secretary to examine: (1) whether the continued imposition of
Section 4. Repealing Clause - All laws, decrees, ordinances, rules
the countervailing duty is necessary to offset the subsidization;
and regulations, executive or administrative orders, and such other
and/or (2) whether the injury will likely continue or recur if the
presidential issuances as are inconsistent with any of the provisions
countervailing duty is removed or modified.
of this Act are hereby repealed, amended or otherwise modified
- If the Commission determines that the countervailing duty is no
accordingly.
longer necessary or warranted, the Secretary shall, upon its
recommendation, immediately issue a department order Section 5. Effectivity Clause - This Act shall take effect after fifteen
terminating the imposition of the countervailing duty and shall (15) days following its publication in at least two (2) newspapers of
notify all parties concerned, including the Commissioner of Customs general circulation. (Approved, August 7, 1999)
through the Secretary of Finance, of such termination.
- Notwithstanding the provisions of the preceding paragraphs of this
subsection, any countervailing duty shall be terminated on a date
not later than five (5) years from the date of its imposition (or from
the date of the most recent review if that review has covered both
subsidization and material injury), unless the Commission has
determined, in a review initiated at least six (6) months prior to the
termination date upon the direction of the Secretary or upon a duly
substantiated request by or on behalf of the domestic industry, that
the termination of the countervailing duty will likely lead to the
continuation or recurrence of the subsidization and material injury.