part v to part vii v4

PART V – NATIONALISTIC LAWSA. Anti-Dummy Act (CA 108) – Ofe & Cai

I. Purpose To secure the ownership, management, exercise or enjoyment of a right, franchise or privilege in which any constitutional or other legal provisions has reserved to Filipino citizens or any other specific citizenship.It is an act to punish evasion of laws or the nationalization of certain rights, franchises and privileges.To provide penalty for violators of constitutional or legal provisions which requires citizenship as a

requisite for the exercise or enjoyment of a right, franchise or privilege?

II. Acts Punishable1. Any citizen of the Philippines or foreign country who allows his (1) name or (2) citizenship to

be used for the purposes of evading constitutional or legal provisions which requires citizenship for the exercise or enjoyment of a right, franchise or privilege and any alien or foreigner profiting thereby. (Sec 1)

2. Simulation of the existence of minimum stock or capital as owned by such citizens for the purpose of evading such provisions. (Sec 2)

3. Employment by any person, corporation, or association of an alien, who shall intervene in the management, operation, administration or control thereof, whether as officer, employee, or laborer, applies where the exercise or enjoyment of the property or of the franchise, privilege, or business engaged in by such person, corporation or association “is expressly reserved by the Constitution or the law to the citizens of the Philippines” or “corporations or associations at least 60% of the capital of which is owned by such citizens.” (Sec 2A)EXCEPTIONS:A. Technical personnel whose employment may be specifically authorized by the Secretary

of Justice. (Sec 2-A) B. The election of aliens as members of the board of directors or governing body of the

enterprise engaged in partially nationalized activities shall be allowed in proportion to their allowable participation or share in the capital of such entities. (Sec 2-A)

III. PENALTIES1. Imprisonment of not less than 5 years but not more than 15 years; AND2. Fine not less than the value of the right, franchise or privilege enjoyed or acquired in violation of the

provisions hereof but in no case less than Php5,000.00. (Section 1)3. Any corporation or association violating any of the provisions of this Act shall, upon proper court

proceedings be dissolved. (Sec 3)4.Any violation of the provisions of this Act by the spouse of any public official, if both live together, shall

be cause for the dismissal of such public official. (Sec 2-B)

IV. SPECIAL RULESA. Presumptions

1. The fact that the citizen of the Philippines or of any specific country charged with a violation of this Act had, at the time of the acquisition of his holdings in the corporations or associations, no real or personal property, credit or other assets the value of which shall at least be equivalent to said holdings, shall be evidence of a violation of this Act. (Sec 1, par. 2)

2. The exercise, possession or control by a Filipino citizen having a common-law relationship with an alien of a right, privilege, property or business, the exercise or enjoyment of which is expressly reserved by the Constitution or the laws to citizens of the Philippines, shall constitute a PRIMA FACIE EVIDENCE of violation of the provisions of Section 2-A hereof. (Sec 2C)

LLB 2-1. The Leftists. Magugulong Magaganda’t Pogi sa Left Side.

B. Reward to Informer1. 25% of the fine imposed shall accrue to the benefit of the informer by furnishing the Government

with original information leading to such conviction;2. If dummy, entitled to 25% of the fine actually paid and shall be exempted from penal liabilities.

B. RETAIL TRADE LIBERALIZATION ACT (RA 8762) – Ofe and CaiI. Purpose

1. Promote consumer welfare in attracting, promoting and welcoming productive investment that will lower down price for the Filipino consumer;

2. Create more jobs;3. Promote tourism;4. Assist small manufacturers;5. Stimulate economic growth;6. Enable Filipino goods and services to become globally competitive through the liberalization of the

retail trade sector;7. Encourage Filipino and competitive retail trade sector in the interest of empowering the Filipino

consumer through lower prices, higher quality goods, better services and wider choices.

II. Definition and coverageA. Consumer Goods vs Non-Consumer Goods

Consumer goods may be defined as "goods which are used or bought for use primarily for personal, family or household purposes. Such goods are not intended for resale or further use in the production of other products." In other words, consumer goods are goods which by their very nature are ready for consumption. (Marsman v First Coconut)Production or Producer goods have been defined as "goods (as tools and raw material) that are factors in the production of other goods and that satisfy wants only indirectly- called also auxiliary goods, instrumental goods, intermediate goods." They are by their very nature not sold to the public for consumption. As such, the sale of producer goods used for industry or business is classified as a wholesale transaction. Wholesaling has been defined as "selling to retailers or jobbers rather than to consumers or a sale in large quantity to one who intends to resell." (Marsman v First Coconut)

B. Exempt Transactions (Sec 3(1)) > transactions w/c are not covered by the provisions of RTLA1) "Retail trade" shall mean any act, occupation or calling of habitually selling direct to the general public merchandise, commodities or goods for consumption, but the restriction of this law shall not apply to the following:

(a) Sales by manufacturer, processor, laborer, or worker, to the general public the products manufactured, processed or products by him if his capital does not exceed One hundred thousand pesos(100,000.00);(b) Sales by a farmer or agriculturist selling the products of his farm;(c) Sales in restaurant operations by a hotel owner or inn-keeper irrespective of the amount capital: provided, that the restaurant is incidental to the hotel business; and(d) Sales which are limited only to products manufactured, processed or assembled by a manufacturer though a single outlet, irrespective of capitalization.

For a sale to be considered as retail, the following elements should concur:(1) The seller should be habitually engaged in selling;(2) The sale must be direct to the general public; and(3) The object of the sale is limited to merchandise, commodities or goods for consumption.


In this case, the first two elements are present. It is the presence of the third element that must be determined. The last element refers to the subject of the retailer's activities or what he is selling, i.e., consumption goods or consumer goods. (Marsman v First Coconut)(2) "High-end or luxury goods" shall refer to goods which are not necessary for life maintenance and whose demand is generated in large part by the higher income groups. Luxury goods shall include, but are not limited to products such as; jewelry, branded or designer clothing and footwear, wearing apparel, leisure and sporting goods, electronics and other personal effects.

C. CategoriesSection 5. Foreign Equity Participation. - Foreign-owned partnerships, associations and corporation formed and organized under the laws of the Philippines may, upon registration with the Securities and Exchange Commission (SEC) and the Department of Trade and Industry (DTI), or in case of foreign owned single proprietorships, with the DTI, Engage or invest in the retail trade business, subject to the following categories.

Category A – Enterprises with paid-up capital of the equivalent in Philippine Peso of the than Two million five hundred thousand US dollars (US$2,500,000.00) shall be reserved exclusively for Filipino citizens and corporations wholly owned by Filipino citizens.Category B – Enterprises with a minimum paid-up capital of the equivalent in Philippine Pesos of two million five hundred thousand US dollar (US$2,500,000.00) but less than Seven million five hundred thousand US dollars (US$7,500,000.00) may be wholly owned by foreigners except for the first two (2) years after the effectivity of this Act wherein foreign participation shall be limited to not more than sixty percent (60%) of total equity.Category C – Enterprises with a paid-up capital of the equivalent in Philippine Pesos of Seven million five hundred thousand US dollars (US$7,500,000.00), or more may be wholly owned by foreigners: Provided, however, That in no case shall the investments for establishing a store investments for establishing a store in Categories B and C be less than the equivalent in Philippine pesos of Eight hundred thirty thousand US dollars (US$830,000.00).Category D – Enterprises specializing in high-end or luxury products with a paid-up capital of the equivalent in Philippine Pesos of Two hundred fifty thousand US dollars (US$250,000.00) per store may be wholly owned by foreigners.

III. Who may engage in Retail TradeSection 8. Qualification of Foreign Retailers. - No foreign retailer shall be allowed to engage in

retail trade in the Philippines unless all the following qualifications are met:(a) A minimum of Two hundred million US dollar (US$200,000,000.00) net worth in its parent corporation for Categories B and C, and Fifty million US dollar (US$50,000,000.00) net worth in its parent corporation for category D;(b) (5) retailing branches or franchises in operation anywhere around the world unless such retailer has at least one (1) store capitalized at a minimum of Twenty-five million US dollars (US$25,000,000.00);(c) Five (5)-year track record in retailing; and(d) Only nationals from, or juridical entities formed or incorporated in Countries which allow the entry of Filipino retailers shall be allowed to engage in retail trade in the Philippines.The DTI is hereby authorized to pre-qualify all foreign retailers, subject to the provisions of this Act,

before they are allowed to conduct business in the Philippine.The DTI shall keep a record of Qualified foreign retailers who may, upon compliance with law,

establish retail stores in the Philippine. It shall ensure that parent retail trading company of the foreign investor complies with the qualifications on capitalization and track record prescribed in this section

The Inter- Agency Committee on Tariff and Related Matters Authority (NEDA) Board shall formulate and regularly update a list of foreign retailers of high-end or luxury goods and render an annual report on the same to Congress.

IV. Application of the Grandfather Rule


A grandfather clause is a provision in which an old rule continues to apply to some existing situations, while a new rule will apply to all future cases. Those exempt from the new rule are said to have grandfather rights or acquired rights. Frequently, the exemption is limited; it may extend for a set period of time, or it may be lost under certain circumstances.

Section 6. Foreign Investors Acquiring Shares of Stock of Local Retailers. - Foreign investors acquiring shares from existing retail stores whether or not publicly listed whose net worth is in the excess of the peso equivalent of Two million five hundred thousand US dollars (US$2,500,000.00) may purchase only up to a maximum of sixty percent (60%) of the equity thereof within the first two (2) years from the effectivity of this Act and thereafter, they may acquire the remaining percentage consistent with the allowable foreign participation as herein provided.

Section 7. Public Offering of Shares of Stock. – All retail trade enterprises under Categories B and C in which foreign ownership exceeds eighty percent (80%) of equity shall offer a minimum of thirty percent (30%) of their equity to the public through any stock exchange in the Philippine within eight (8) years from their start of operations.

V. Prohibitions and PenaltiesSection 10. Prohibited Activities of Qualified Foreign Retailers. – Qualified foreign retailers shall not

be allowed to engage in certain retailing activities outside their accredited stores through the use of mobile or rolling stores or carts, the use of sales representatives, door-to-door selling, restaurants and sari-sari stores and such other similar retailing activities: Provided, That a detailed list of prohibited activities shall hereafter be formulated by the DTI.

Section 12. Penalty Clause. - Any person who shall be Found guilty of Violation of any provision of this Act shall be punished by imprisonment of not less than six (2) years and one (1) day but not more than eight (8) years, and a fine of not less than One million pesos (P1,000,000.00) but not more than Twenty million pesos (P20,000,000.00) In the case of associations, partnerships or corporations, the penalty shall be imposed upon its partners, president, directors, manager and other officers responsible for the violation. If the offender is not a citizen of the Philippines he shall be deported immediately after service of sentence. If the Filipino offender is a public officer or employee, he shall, in addition to the penalty prescribed herein, suffer dismissal and permanent disqualification from public office.

CASES:1. Balmaceda vs Union Carbide Philippines (124 SCRA 893 (1983))

ISSUE: WN Union Carbide Philippines, Inc. is engaging in the retail business.RULING: In the field of economics, in the area of marketing, the interpretation given by Government agencies, and by common acceptation the term 'retail', is associated with and limited to goods for personal, family or household use, consumption and utilization. This is also in accord with the ruling of the Supreme Court in the Ichong case regarding the nature and kind of goods a retailer handles. Under the situation, the Court is persuaded to hold that the goods for consumption mentioned in Republic Act No. 1180 should be construed to refer to the final and end [uses] of a product which directly satisfy human wants and desires and are needed for home and daily life. Accordingly, the goods which petitioner's Industrial Products Division handle (commonly referred to as intermediate goods), do not fall and cannot be classified as consumption goods.

The goods handled by the five remaining departments of petitioner's Industrial Products Division are generally raw materials used in the manufacture of other goods, or if not, as one of the component raw materials, or at the least as elements utilized in the process of production or manufacturing.

The Court affirms the lower court decision holding that Union Carbide Philippines, Inc. is not engaged in the "retail business."

2. B.F. Goodrich vs Reyes (121 SCRA 363 (1998))FACTS: Petitioner B.F. Goodrich Philippines, Inc. contends in this declaratory relief proceeding, with the then Secretary of Commerce and Industry Teofilo Reyes, Sr. as respondent, that it does not fall within the ban. It is engaged in the business of manufacturing and selling rubber products, principally automotive tires and tubes, batteries, conveyor belts, heels and soles for shoes and tiles to dealers who in turn sells it to others. 3 Under the statute, it cannot engage in retail business, namely to sell direct to the general public, merchandise, commodities


or goods for consumption. 4 It admitted that it sold directly to the government and all its instrumentalities and/or agencies; public utilities; agricultural enterprises; logging, mining, and natural resources exploration firms; automotive assembly plants who buy its products in large bulk; industrial enterprises; and employees and officers of its company.

ISSUE: Whether the business of BF Goodrich constitutes “retail business” and thus restrained from engaging in the business.

RULING: A ruling on the question raised as to the precise meaning of retail business is obviated by the issuance of Presidential Decree No. 714 8 amending Republic Act No. 1180. Under the former, which took effect without presidential approval on June 19, 1954, the term "retail business" covers "any act, occupation or calling of habitually selling direct to the general public merchandise, commodities or goods for consumption, but shall not include: (a) a manufacturer, processor, laborer or worker selling to the general public the products manufactured, processed or produced by him if his capital does not exceed five thousand pesos, or (b) a farmer or agriculturist selling the product of his farm." 9 Under the aforesaid Presidential Decree, which took effect on May 28, 1975, two more paragraphs were included. They are: "(c) a manufacturer or processor selling to the industrial and commercial users or consumers who use the products bought by them to render service to the general public and/or to produce or manufacture goods which are in turn sold to them; (d) a hotel- owner or keeper operating a restaurant irrespective of the amount of capital, provided that the restaurant is necessarily included in, or incidental to, the hotel business." 10 It is clear from the above that proprietary planters and persons engaged in the exploration of natural resources are included within the aforesaid amendment. The lower court decision, however, is in accordance with law insofar as employees and officers of petitioners are concerned. As thus modified, the decision calls for affirmance.

3. Marsman & Co. vs First Coconut Central Co. (162 SCRA 206 (1988))ISSUE: Whether the sale of industrial machinery covered by the Anti-Dummy Law and the Retail Nationalization Law.RULING: No. In the case at bar, the article in controversy is a piece of industrial machinery—a diesel generating unit. The said unit was purchased by respondent to be used in its coconut central and as such may be classified as "production or producer goods." Since the diesel generating unit is not a consumer item, it necessarily does not come within the ambit of retail business as defined by Republic Act No. 1180. Hence, herein petitioner Marsman & Company, Inc. may engage in the business of selling producer goods. It necessarily follows that petitioner cannot be guilty of violating the Anti- Dummy Law or of using a dummy since it is not prohibited by the Retail Trade Nationalization Law from selling the diesel generating unit to herein respondent. From the foregoing, there can be no basis in law for declaring the contract of sale as null and void.

That the sales to industrial or commercial users do not fall within the scope of the Retail Trade Nationalization Law is further confirmed by Presidential Decree No. 714 promulgated on May 28, 1975 amending said law when the latter provided in its preamble that "Whereas, it is believed to be not within the intendment of said nationalization law to include within its scope sales made to industrial or commercial users or consumers; ...."

4. Goodyear Tire and Rubber vs Reyes (123 SCRA 273 (1983)): Proprietary planters and persons engaged in the exploration of natural resources are not considered as engaged in retail business.

C. Flag Law (CA 138 as amended by RA 912) – Cortez Can be invoked against a foreigner. Can it be invoked against a Filipino? Yes, if imported/foreign products or raw materials will be used

I. Coveragea. Who are covered?

Sec. 1 of CA 138 states the following that are covered by the said law.


The Purchase and Equipment Division (now Supply Coordination Office) of the Government of the Philippines and other officers and employees of the municipal and provincial governments and the Government of the Philippines and of chartered cities, boards, commissions, bureaus, departments, offices, agencies, branches, and bodies of any description, including government-owned companies, authorized to requisition, purchase, or contract or make disbursements for articles, materials, and supplies for public use, public biddings, or public works.For what purpose?Sec. 1 of the same law also states that the above mentioned, shall give preference to materials and supplies produced, made, and manufactured in the Philippines or in the United States, and to domestic entities, subject to the conditions herein-below specified.

b. What articles are covered?Sec. 3 of the same law provides the materials and articles that are covered.Only un-manufactured articles, materials, or supplies of the growth or production of the Philippines or the United States, and only such manufactured articles, materials, or supplies as have been manufactured in the Philippines or in the Unites States, substantially from articles, materials, or supplies of the growth, production, or manufacture, as the case may be, of the Philippines or of the United States, shall be purchased for public use.And in case of bidding, these materials are subject to the following:

(a)When the lowest foreign bid, including customs duties, does not exceed two pesos, the award shall be made to the lowest domestic bidder, provided his bid is not more than one hundred per centum in excess of the foreign bid;(b) When the lowest foreign bid, including customs duties, exceeds two pesos but does not exceed twenty pesos, the award shall be made to the lowest domestic bidder, provided his bid is not more than fifty per centum in excess of the lowest foreign bid;(c) When the lowest foreign bid, including customs duties, exceeds twenty pesos but does not exceed two hundred pesos, the award shall be made to the lowest domestic bidder, provided his bid is not more than twenty-five per centum in excess of the lowest foreign bid;(d) When the lowest foreign bid, including customs duties, exceeds two hundred pesos but does not exceed two thousand pesos, the award shall be made to the lowest domestic bidder, provided his bid is not more than twenty per centum in excess of the lowest foreign bid;(e) When the lowest foreign bid, including customs duties, exceeds two thousand pesos, the award shall be made to the lowest domestic bidder, provided his bid is not more than fifteen per centum in excess of the lowest foreign bid.

What if there are several bidders who participated?Sec. 4 provides that whenever several bidders shall participate in the bidding for supplying articles, materials, and equipment for any dependencies mentioned in section one of this Act for public use, public buildings, or public works, the award shall be made to the domestic entity making the lowest bid, provided it is not more than fifteen per centum in excess of the lowest bid made by a bidder other than a domestic entity, as the term "domestic entity" is defined in section two of this Act.Note: Sec. 2 provides for definitions that are used in the said law. Section2. For the purposes of this Act, the terms hereunder are hereby defined as follows:(a) The term "United States" includes the United States of America, the District of Columbia, and any State or territory of the North American Union;(b) The term "domestic entity" means any citizen of the Philippines or of the United States habitually established in business and engaged in the manufacture or sale of the merchandise covered by his bid, or any corporate body or commercial company duly organized and registered under the laws of the Philippines of whose capital 75 per centum is owned by citizens of the Philippines or of the United States, or both;(c) The term "domestic bidder" means any person or entity offering un-manufactured articles, materials, or supplies of the growth or production of the Philippines or of the United States, or manufactured articles, materials or supplies manufactured or to be manufactured in the Philippines or in the United States, substantially from articles, materials or supplies of the growth, production or manufacture, as the case may be, of the Philippines or of the United States;(d) The term "foreign bid" means any offer of articles, materials or supplies not manufactured or to be manufactured in the Philippines or in the Unites States, substantially from articles, materials, or supplies of the growth, production, or manufacture, as the case may be, of the Philippines or of the United States.


RA 912 (An act to require the use, under certain conditions, of Philippine made materials or products in government projects or public works construction, whether done directly by the government or awarded thru contracts).Who are covered?Those who are also covered by CA 138, are also covered by RA 912.What materials are covered?Sec. 1 of RA 912 provides that in construction or repair work undertaken by the government, whether done directly or thru contract awards, Philippine made materials and products, whenever available, practicable and usable, and will serve the purpose as equally well as foreign made products or materials shall be used in said construction or repair work, upon the proper certification of the availability, practicability, usability and durability of said materials or products by the Director of the Bureau of Public Works and / or his assistants.Violations / Sanctions?Sec. 3 of the said law provides that no contract may be awarded under the provisions of the said act unless the contractor agrees to comply with the requirements of the same, and a contract already awarded may be rescinded for unjustified failure to so comply.Sec. 4 provides that it shall be the duty of the Director of the Bureau of Public Works and / or his assistants, including district engineers, to see to it that the requirements of the said act are faithfully complied with by the persons concerned, and failure on their part to do so shall subject them to dismissal from the government service or other disciplinary actions.

D. Philippine Flag Carriers Law – Cortez Purpose is to conserve foreign reserves.I. Coverage

Who are covered and what are covered? (Those w/ existing contracts or existing loans w/ the govt.)Sec. 2. Any person, partnership, association or corporation, contractor and subcontractor, granted and enjoying any tax exemption, subsidy or incentive from the Government, or with an outstanding loan from or whose existing obligation is guaranteed by the Government or by any Government owned or controlled corporation and financial institution, or awarded any contract by the Government or any of its agencies and instrumentalities, requiring any transportation of persons and property by air or water between the Philippines and a place outside thereof or between two places both of which are outside the Philippines, the payment for which is made directly or indirectly from the funds of such person, partnership, association, corporation, contractor or subcontractor, shall cause such air or water transportation to be provided by the Philippine flag air carrier or shipping lines to the maximum extent service by such air carrier or shipping lines is available: Provided, That any such person, partnership, association, corporation, contractor or subcontractor may procure the services of foreign air carriers or shipping lines to the extent that service by the Philippine flag air carrier or shipping lines is not available, only upon prior certification by the Civil Aeronautics Board or by the Board of Transportation, as the case may be.When is it applicable? (Test is: will the govt be spending for your transpo expenses; should involve disbursement of govt funds)Sec. 1. Whenever any branch, department, agency, instrumentality or office of the Government including local governments and corporations and institutions owned and controlled by the Government, shall procure, contract for, or otherwise obtain, directly or indirectly any transportation of persons or property by air or water between the Philippines and a place outside thereof or between two places both of which are outside the Philippines, the payment for which is made directly or indirectly from funds of the Republic of the Philippines, the appropriate agency or agencies and public officials concerned shall take such steps as may be necessary to assure that such transportation is provided by the Philippine flag air carrier or shipping lines to the maximum extent service by such carrier and shipping lines is available.Sec. 3. The Auditor General shall disallow any expenditure from appropriated funds of the Government for payment of passenger or cargo transportation on foreign flag air carriers and shipping lines in the absence of satisfactory proof of the clear necessity therefore.Violations / Sanctions?


Sec. 4 Any violation of the provisions of Section 2 shall cause the withdrawal, revocation, cancellation, or acceleration of payment, as the case may be, of the tax exemption, subsidy, incentive, loan, guarantee and contract of such person, partnership, association or corporation.

PART VI – CONSUMER LAWSA. Consumer Protection Act (RA 7394) – Nogoy i. Purpose ii. Definition and Coverage iii. Consumer Product, Quality and Safety iv. Rule on Food, Drugs, Cosmetics and Hazardous Substancesv. Prohibited Acts vi. Rule on Deceptive Acts and Practices

c. Sales Acts and Practicesd. Weights and Measurese. Warrantiesf. Labelingg. Advertising and Promotionsh. Liabilities

vii. Consumer Complaints

B. E-Commerce Act (RA 8792) – Ron(lahat ng char-char sa batas na ito is directed towards recognizing e-messages, e-documents, and e-signature as part of national commerce (and non-commerce pa daw kuno). Counterpart lang ang lahat ng ito nung oral or written messages, physical documents, and tangible consent = physical signature. Suma total, binibigyan lang ng batas na ito ng legal effects yung kung ano ang uso ngayon. Electronic form and transmission of agreements)

i. Declaration of Policy (Sec 2) a) Recognize vital role of information and communications technology (ICT)b) Create and ensure an information-friendly environmentc) Private sector invests in ICTd) Develop a labor force and population skilled in ICTe) Transfer and promote ICT for national benefitf) Organize and deploy ICT infrastructures connected globally with legal, technical, diplomatic and

technical outputs

Sec. 2. Declaration of Policy. - The State recognizes the vital role of information and communications technology (ICT) in nation-building; the need to create an information-friendly environment which supports and ensures the availability, diversity and affordability of ICT products and services; the primary responsibility of the private sector in contributing investments and services in telecommunications and information technology; the need to develop, with appropriate training programs and institutional policy changes, human resources for the information technology age, a labor force skilled in the use of ICT and a population capable of operating and utilizing electronic appliances and computers; its obligation to facilitate the transfer and promotion of adaptation technology, to ensure network security, connectivity and neutrality of technology for the national benefit; and the need to marshal, organize and deploy national information infrastructures, comprising in both telecommunications network and strategic information services, including their interconnection to the global information networks, with the necessary and appropriate legal, financial, diplomatic and technical framework, systems and facilities.

2) E-Documents, Data Messages and Signaturea) Legal recognition


Legal recognition of Legal EffectsData Messages(Sec 6)

1) With legal effect, validity or enforceability2) Solely on the grounds that

a) it is in the data message purporting to give rise to such legal effect, or

b) that it is merely referred to in that electronic data messageElectronic Documents(Sec 7)

1) With legal effect, validity or enforceability as any other document or legal writing; and

2) If law requires a document in writing, then that e-document also meets that requirement as long as the e-document can maintain its integrity and reliability and authenticateda) e-doc has remained complete and unaltered (changes not counted =

endorsements, authorized changes, arising from normal course of communication, storage and display)

b) e-doc is reliable for which it was generated and for all relevant circumstances

3) If law requires an obligation to be in writing, then that e-document also meets that requirement as long as the e-document can maintain its integrity and reliability and authenticated

4) If law requires consequences whenever a document is not presented or retained in its original form, then that e-document also meets that requirement as long as the e-document can maintain its integrity and reliability and authenticated

5) If law requires that a document be presented or retained in its original form, then that e-document also meets that requirement as long asa) there is a reliable assurance when it was first generated as final

versionb) capable of being displayed to the person it is to be presented, as

long as it does not change the requirements of existing laws on formalities required in the execution of documents for their validity

6) e-doc can stand as evidence; functional equivalent of a written document under existing laws

7) EXCEPTION: This Act does not modify any statutory rule relating to the admissibility of electronic data messages or electronic documents, except the rules relating to authentication and best evidence

Electronic Signature(Sec 8)

1) With legal effect, validity or enforceability as signature of a person on a written document as long as it can be shown that there is an existing prescribed procedure that cannot be altered by the parties interested in the electronic document, whicha) There is a method to identify the consenting or approving partyb) There is a method to indicate access to the e-docc) The method is reliable and appropriate for the purposed) The consenting party must have executed or provided the electronic

signature before proceeding with the transactione) The other party is authorized and enabled to verify the electronic

signature and to make the decision to proceed with the transaction authenticated by the same

“Sec. 9. Presumption Relating to Electronic Signatures. - In any proceedings involving an electronic signature, it shall be presumed that -

(a) The electronic signature is the signature of the person to whom it correlates; and


(b) The electronic signature was affixed by that person with the intention of signing or approving the electronic document unless the person relying on the electronically signed electronic document knows or has notice of defects in or unreliability of the signature or reliance on the electronic signature is not reasonable under the circumstances.”

Note: I will add Secs 10 – 15 kasi I think this is also importantSEC. 11. Authentication of Electronic Data Messages and Electronic Documents. - Until the Supreme Court by appropriate rules shall have so provided, electronic documents, electronic data messages and electronic signatures, shall be authenticated by demonstrating, substantiating and validating a claimed identity of a user, device, or another entity in an information or communication system, among other ways, as follows:

(a) The electronic signature shall be authenticated by proof that a letter, character, number or other symbol in electronic form representing the persons named in and attached to or logically associated with an electronic data message, electronic document, or that the appropriate methodology or security procedures, when applicable, were employed or adopted by a person and executed or adopted by such person, with the intention of authenticating or approving an electronic data message or electronic document;

(b) The electronic data message and electronic document shall be authenticated by proof that an appropriate security procedure, when applicable was adopted and employed for the purpose of verifying the originator of an electronic data message and/or electronic document, orndetecting error or alteration in the communication, content or storage of an electronic document or electronic data message from a specific point, which, using algorithm or codes, identifying words or numbers, encryptions, answers back or acknowledgment procedures, or similar security devices. The Supreme Court may adopt such other authentication procedures, including the use of electronic notarization systems as necessary and advisable, as well as the certificate of authentication on printed or hard copies of the electronic document or electronic data messages by electronic notaries, service providers and other duly recognized or appointed certification authorities. The person seeking to introduce an electronic data message and electronic document in any legal proceeding has the burden of proving its authenticity by evidence capable of supporting a finding that the electronic data message and electronic document is what the person claims it to be. In the absence of evidence to the contrary, the integrity of the information and communication system in which an electronic data message or electronic document is recorded or stored may be established in any legal proceeding -

(a) By evidence that at all material times the information and communication system or other similar device was operating in a manner that did not affect the integrity of the electronic data message and/or electronic document, and there are no other reasonable grounds to doubt the integrity of the information and communication system;

(b) By showing that the electronic data message and/or electronic document was recorded or stored by a party to the proceedings who is adverse in interest to the party using it; or

(c) By showing that the electronic data message and/or electronic document was recorded or stored in the usual and ordinary course of business by a person who is not a party to the proceedings and who did not act under the control of the party using the record.

SEC. 12. Admissibility and Evidential Weight of Electronic Data Message and Electronic Documents. - In any legal proceedings, nothing in the application of the rules on evidence shall deny the admissibility of an electronic data message or electronic document in evidence -

a. On the sole ground that it is in electronic form; or


b. On the ground that it is not in the standard written form and electronic data message or electronic document meeting, and complying with the requirements under Sections 6 or 7 hereof shall be the best evidence of the agreement and transaction contained therein.

In assessing the evidential weight of an electronic data message or electronic document, the reliability of the manner in which it was generated, stored or communicated, the reliability of the manner in which its originator was identified, and other relevant factors shall be given due regard.

SEC. 13. Retention of Electronic Data Message and Electronic Document. - Notwithstanding any provision of law, rule or regulation to the contrary - (a) The requirement in any provision of law that certain documents be retained in their original form is satisfied by

retaining them in the form of an electronic data message or electronic document which -

i. Remains accessible so as to be usable for subsequent reference; ii. Is retained in the format in which it was generated, sent or received, or in a format which can be demonstrated to accurately represent the electronic data message or electronic document generated, sent or received; iii. Enables the identification of its originator and addressee, as well as the determination of the date and the time it was sent or received. (b) The requirement referred to in paragraph (a) is satisfied by using the services of a third party, provided that the conditions set forth in subparagraphs (i), (ii) and (iii) of paragraph (a) are met.

SEC. 14. Proof By Affidavit. - The matters referred to in Section 12, on admissibility and Section 9, on the presumption of integrity, may be presumed to have been established by an affidavit given to the best of the deponent's knowledge subject to the rights of parties in interest as defined in the following section. SEC. 15. Cross-Examination. - (1) A deponent of an affidavit referred to in Section 14 that has been introduced in evidence may be cross-examined as of right by a party to the proceedings who is adverse in interest to the party who has introduced the affidavit or has caused the affidavit to be introduced. (2) Any party to the proceedings has the right to cross-examine a person referred to in Section 11, paragraph 4, sub-paragraph c.

b) Attribution

“SEC. 18. Attribution of Electronic Data Message. -

“SEC. 19. Error on Electronic Data Message or Electronic Document. - The addressee is entitled to regard the electronic data message or electronic document received as that which the originator intended to send, and to act on that assumption, unless the addressee knew or should have known, had the addressee exercised reasonable care or used the appropriate procedure -

(a) That the transmission resulted in any error therein or in the electronic document when the electronic data message or electronic document enters the designated information system, or

(b) That electronic data message or electronic document is sent to an information system which is not so designated by the addressee for the purpose.”

From whom will you attribute the e-message or e-doc?

Conditions

From the Originator 1) If sent by the originator himself2) If sent by authorized person to act on behalf

of the originator3) If sent by an information system programmed

by, or on behalf of the originator to operate automatically

4) If the addressee properly applied a procedure


previously agreed to by the originator in order to ascertain whether the electronic data message or electronic document was that of the originator’s

5) If it resulted from the actions of a person whose relationship with the originator or with any agent of the originator enabled that person to gain access to a method used by the originator to identify electronic data messages as the originator’s, as received by the addressee.

NOT FROM the Originator (but not to the addressee din)

1) as of the time when the addressee has both received notice from the originator that the electronic data message or electronic document is not that of the originator’s, and has reasonable time to act accordingly

2) (eto, tinira ng hacker, at alam ng addressee na na-hack) at any time when the addressee knew or should have known, had it exercised reasonable care or used any agreed procedure, that the electronic data message or electronic document was not that of the originator’s when a person whose relationship with the originator or with any agent of the originator enabled that person to gain access to a method used by the originator to identify electronic data messages as his own

the addressee is entitled to regard the e-message or e-doc as received

1) as what the originator intended to send, and to act on that assumption

2) but not entitled to regard as received according to originator’s intention if he knew or should have known, had it exercised reasonable care or used any agreed procedure, that the transmission resulted in any error in the electronic data message or electronic document as received

3) as a separate e-message or e-doc and to act on that assumption (e.g. twice kang pinadalhan ng text ng “wer na u, dito na me”. Ibig sabihin twice daw syang nagtanong sa iyo)

4) But not entitled to regard as received as separate e-message or e-doc and to act on that assumption, to the extent that it duplicates another electronic data message or electronic document and the addressee knew or should have known, had it exercised reasonable care or used any agreed procedure, that the electronic data message or electronic document was a duplicate. (e.g. twice kang pinadalahan na nanalo ka ng first prize. so dapat isa lang yun, first prize nga e.)

5) That the transmission resulted in any error therein or in the electronic document when the electronic data message or electronic document enters the designated information


system6) That that e-message or e-doc is sent to an

information system which is not so designated by the addressee for the purpose

c) Time and Place of Communication

Time of Dispatch of e-message or e-doc (Sec 21) 1) when it enters an information system outside the control of the originator or of the person who sent the electronic data message or electronic document on behalf of the originator(e.g. nagsend ka ng text. Napunta na sa Globe yung text mo. Once na nasa repeater na ng globe, yun ang time ng dispatch.)EXCEPTION: when time is agreed by the parties

Time of Receipt of e-message or e-doc (Sec 21) Rules: (regardless of the location of the information system)1) If there is a designated an information

system then receipt = upon entry in designated information system:

2) If the originator and the addressee are both participants in the designated information system then receipt = upon retrieval by the addressee (e.g. kung nagsend ka sa yahoo mail papunta sa gmail, yung time na pumasok ng gmail system ang time of receipt. Pero kung yahoo to yahoo, upon opening of the email (yun din kasi ang retrieval kadalasan)

3) If sent to an information system of the addressee that is not the designated information system, then receipt = upon retrieval by the addressee

EXCEPTION: agreement of the parties.Place of Dispatch and Receipt of e-message or e-doc (Sec 23)

1) General Rule: deemed to be dispatched at the place of business of the originator; and received at the place of business of the addressee

2) This rule applies whether a mobile equipment was used by both. This rule shall apply to tax situs of transactions.

3) If both originator and addressee has multiple place of business, then it is the place of business which has the closest relationship to the underlying transaction or, where there is no underlying transaction, the principal place of business

4) If the originator or addressee does not have any place of business, then his habitual residence

5) The “usual place of residence” in relation to a body corporate, means the place of incorporation or place of legal constitution


4) e-Commerce in Carriage of Goods

“SEC. 25. Actions Related to Contracts of Carriage of Goods. - Without derogating from the provisions of part two of this law, this chapter applies to any action in connection with, or in pursuance of, a contract of carriage of goods, including but not limited to:

(a) (i) furnishing the marks, number, quantity or weight of goods; (ii) stating or declaring the nature or value of goods; (iii) issuing a receipt for goods; (iv) confirming that goods have been loaded; (b) (i) notifying a person of terms and conditions of the contract; (ii) Giving instructions to a carrier; (c) (i) claiming delivery of goods; (ii) authorizing release of goods; (iii) giving notice of loss of, or damage to, goods; (d) giving any other notice or statement in connection with the performance of the contract; (e) undertaking to deliver goods to a named person or a person (f) granting, acquiring, renouncing, surrendering, transferring or negotiating rights in goods; (f) Acquiring or transferring rights and obligations under the contract.”

“SEC. 26. Transport Documents. - (1) Where the law requires that any action referred to contract of carriage of goods be carried out in writing or by using a paper document, that requirement is met if the action is carried out by using one or more data messages or electronic documents.

(2) Paragraph (1) applies whether the requirement therein is in the form of an obligation or whether the law simply provides consequences for failing either to carry out the action in writing or to use a paper document.

(3) If a right is to be granted to, or an obligation is to be acquired by, one person and no other person, and if the law requires that, in order to effect this, the right or obligation must be conveyed to that person by the transfer, or use of, a paper document, that requirement is met if the right or obligation is conveyed by using one or more electronic data messages or electronic documents unique;

(4) For the purposes of paragraph (3), the standard of reliability required shall be assessed in the light of the purpose for which the right or obligation was conveyed and in the light of all the circumstances, including any relevant agreement.

(5) Where one or more data messages are used to effect any action in subparagraphs (f) and (g) of Section 25, no paper document used to effect any such action is valid unless the use of electronic data message or electronic document has been terminated and replaced by the use of paper documents. A paper document issued in these circumstances shall contain a statement of such termination. The replacement of electronic data messages or electronic documents by paper documents shall not affect the rights or obligations of the parties involved. If a rule of law is compulsorily applicable to a contract of carriage of goods which is in, or is evidenced by, a paper document, that rule shall not be inapplicable to such a contract of carriage of goods which is evidenced by one or more electronic data messages or electronic documents by reason of the fact that the contract is evidenced by such electronic data messages or electronic documents instead of by a paper document.”

5) Liabilities and Penalties


“SEC. 30. Extent of Liability of a Service Provider. – Except as otherwise provided in this Section, no person or

party shall be subject to any civil or criminal liability in respect of the electronic data message or electronic

document for which the person or party acting as a service provider as defined in Section 5 merely provides

access if such liability is founded on -

(a) The obligations and liabilities of the parties under the electronic data message or electronic document; (b) The making, publication, dissemination or distribution of such material or any statement made in such

material, including possible infringement of any right subsisting in or in relation to such material: Provided, That: i. The service provider does not have actual knowledge, or is not aware of the facts or circumstances from which it is apparent, that the making, publication, dissemination or distribution of such material is unlawful or infringes any rights subsisting in or in relation to such material; ii. The service provider does not knowingly receive a financial benefit directly attributable to the unlawful or infringing activity; and iii. The service provider does not directly commit any infringement or other unlawful act and does not induce or cause another person or party to commit any infringement or other unlawful act and/or does not benefit financially from the infringing activity or unlawful act of another person or party: Provided, further, That nothing in this Section shall affect -

a) Any obligation founded on contract; b) The obligation of a service provider as such under a licensing or other regulatory regime established

under written law; or c) Any obligation imposed under any written law; d) The civil liability of any party to the extent that such liability forms the basis for injunctive relief

issued by a court under any law requiring that the service provider take or refrain from actions necessary to remove, block or deny access to any material, or to preserve evidence of violation of law. “

SEC. 31. Lawful Access. - Access to an electronic file, or an electronic signature of an electronic data message or electronic document shall only be authorized and enforced in favor of the individual or entity having a legal right to the possession or the use of the plaintext, electronic signature or file and solely for the authorized purposes. The electronic key for identity or integrity shall not be made available to any person or party without the consent of the individual or entity in lawful possession of that electronic key.

SEC. 32. Obligation of Confidentiality. - Except for the purposes authorized under this Act, any person who obtained access to any electronic key, electronic data message, or electronic document, book, register, correspondence, information, or other material pursuant to any powers conferred under this Act, shall not convey to or share the same with any other person.

SEC. 33. Penalties. - The following Acts shall be penalized by fine and/or imprisonment, as follows:

(a) Hacking or cracking which refers to unauthorized access into or interference in a computer system/server or information and communication system; or any access in order to corrupt, alter, steal, or destroy using a computer or other similar information and communication devices, without the knowledge and consent of the owner of the computer or information and communications system, including the introduction of computer viruses and the like, resulting in the corruption, destruction, alteration, theft or loss of electronic data messages or electronic document shall be punished by a minimum fine of one hundred thousand pesos (P100,000.00) and a maximum commensurate to the damage incurred and a mandatory imprisonment of six (6) months to three (3) years;

(b) Piracy or the unauthorized copying, reproduction, dissemination, distribution, importation, use, removal, alteration, substitution, modification, storage, uploading, downloading, communication, making available to the public, or broadcasting of protected material, electronic signature or copyrighted works including legally protected


sound recordings or phonograms or information material on protected works, through the use of telecommunication networks, such as, but not limited to, the internet, in a manner that infringes intellectual property rights shall be punished by a minimum fine of one hundred thousand pesos (P100,000.00) and a maximum commensurate to the damage incurred and a mandatory imprisonment of six (6) months to three (3) years;

(c) Violations of the Consumer Act or Republic Act No. 7394 and other relevant or pertinent laws through transactions covered by or using electronic data messages or electronic documents, shall be penalized with the same penalties as provided in those laws;

Other violations of the provisions of this Act, shall be penalized with a maximum penalty of one million pesos (P1, 000,000.00) or six (6) years imprisonment.

Part VII – LAWS ON PROTECTION OF DOMESTIC INDUSTRIESA. Countervailing duties on imported subsidized products (RA 8751) – Paul

i. Elements Countervailing duty is a levy imposed in addition to any ordinary duties, taxes and charges imposed by law on an imported product, commodity or article that is:

a. Granted directly or indirectly by the government in the country of origin or exportation, any kind or form of specific subsidy upon the production, manufacture or exportation of such product, commodity or article; and

b. The importation of such subsidized product, commodity or article has caused or threatens to cause material injury to a domestic industry or has materially retarded the growth or prevents the establishment of a domestic industry as determined by the Tariff Commission (Sec 1A)

ii. Determination of the Subsidy Sec 1(H). Determination of the Existence of Subsidy(1) When the government or any public body in the country of origin or export of the imported product, commodity or article extends financial contribution to the producer, manufacturer or exporter of such product, commodity or article in the form of:

(a) Direct transfer of funds such as grants, loans or equity infusion; or(b) Potential direct transfer of funds or assumption of liabilities such as loan guarantees; or (c) Foregone or uncollected government revenue that is otherwise due from the producer, manufacturer or exporter of the product, commodity or article: Provided, That the exemption of any exported product, commodity or article from duty or tax imposed on like products, commodity or article when destined for consumption in the country of origin and/or export or the refunding of such duty or tax, shall not be deemed to constitute a grant of a subsidy: Provided, further, That should a product, commodity or article be allowed drawback by the country of origin or export, only the ascertained or estimated amount by which the total amount of duties and/or internal revenue taxes was discounted or reduced, if any, shall constitute a subsidy; or(d) Provision of goods or services other than general infrastructure; or(e) Purchases of goods from the producer, manufacturer or exporter; or(f) Payments to a funding mechanism; or(g) Other financial contributions to a private body to carry out one or more of the activities mentioned in subparagraphs (a) to (f) above; or(h) Direct or indirect income or price support;

(2) When there is a benefit conferred. Sec1 (I) Determination of Specific Subsidy. - In the determination of whether or not a subsidy is specific, the following principles shall apply:


(1) Where the government or any public body in the country of origin or export of the imported product, commodity or article explicitly limits access to a subsidy to certain enterprises, such subsidy shall be specific;(2) Where such government or public body through a law or regulation establishes objective criteria and conditions governing the eligibility for, and the amount of, a subsidy, specificity shall not exist: Provided, That the eligibility is automatic and that such criteria or conditions are strictly adhered to. Objective criteria shall mean those which are neutral, do not favor certain enterprises over others, and are economic in nature and horizontal in application, such as number of employees or size of enterprise;(3) In case a subsidy appears to be non-specific according to subparagraphs (1) and (2) above, but there are reasons to believe that the subsidy may in fact be specific, factors that may be considered are: use of a subsidy program by a limited number of certain enterprises for a relatively longer period; granting of disproportionately large amounts of subsidy to certain enterprises; and exercise of wide and unwarranted discretion for granting a subsidy; and(4) A subsidy which is limited to certain enterprises located within a designated geographical region within the territory of the government or public body in the country of origin or export shall be specific.

iii. Determination of Injury (Sec 1J) The presence and extent of material injury or threat thereof to a domestic industry, or the material retardation of the growth, or the prevention of the establishment of a nascent enterprise because of the subsidized imports, shall be determined by the Secretary or the Commission, as the case may be, on the basis of positive evidence and shall require an objective examination of: (1) The volume of the subsidized imports, that is, whether there has been a significant increase either absolute or relative to production or consumption in the domestic market;(2) The effect of the subsidized imports on prices in the domestic market for the like product, commodity or article, that is, whether there has been a significant price undercutting, or whether the effect of such imports is otherwise to depress prices to a significant degree or to prevent price increases, which otherwise would have occurred to a significant degree;(3) The effect of the subsidized imports on the domestic producers of the like product, commodity or article, including an evaluation of all relevant economic factors and indices having a bearing on the state of the domestic industry concerned, such as, but not limited to, actual and potential decline in output, sales, market share, profits, productivity, return on investments, or utilization of capacity; factors affecting domestic prices; actual or potential negative effects on the cash flow, inventories, employment, wages, growth, ability to raise capital or investments and, in the case of agriculture, whether there has been an increased burden on the support programs of the national government; and(4) Factors other than the subsidized imports which at the same time are injuring the domestic industry, such as volumes and prices of non-subsidized imports of the product, commodity or article in question; contraction in demand or changes in the patterns of consumption; trade restrictive practices of and competition between the foreign and domestic producers; developments in technology and the export performance and productivity of the domestic industry. In determining threat of material injury, the Secretary or the Commission, as the case may be, shall decide on the basis of facts and not merely allegation, conjecture or remote possibility. The change in circumstances which would create a situation in which the subsidized imports would cause injury should be clearly foreseen and imminent considering such relevant factors as: (1) Nature of the subsidy in question and the trade effects likely to arise therefrom;(2) Significant rate of increase of subsidized imports into the domestic market indicating the likelihood of substantially increased importations;(3) Sufficient freely disposable, or an imminent substantial increase in, capacity of the exporter of such subsidized imported product, commodity or article indicating the likelihood of substantially increased subsidized imports to the domestic market, taking into account the availability of other markets to absorb the additional exports;(4) Whether these subsidized imports are entering at prices that will have a significant depressing or suppressing effect on domestic prices, and will likely increase demand for further imports; and(5) Inventories of the product, commodity, or article being investigated.


In the case where the effect of the subsidized import will materially retard the growth or prevent the establishment of a domestic industry, information on employment, capital investment, production and sales, and production capacity of said domestic industry can be augmented or substituted by showing through a factual study, report or other data that an industry which has potential to grow domestically is adversely affected by the subsidized import. For this purpose, the Department of Trade and Industry for non-agricultural products, and the Department of Agriculture for agricultural products, shall conduct continuing studies to identify and determine the specific industries, whether locally existing or not, which have the potential to grow or to be established domestically and whose growth or establishment will be retarded or prevented by a subsidized import.

iv. Investigation Who may order: (Sec 1A)

1. Sec of DTI in case of non-agricultural product commodity or article2. Sec of Agriculture in case of agricultural product commodity or article

a. Requirements (Sec 1B)A petition shall be filed with the Secretary and shall be accompanied by documents, if any, which are reasonably available to the petitioner and which contain information supporting the facts that are essential to establish the presence of the elements for the imposition of a countervailing duty, and shall further state, among others: (1) The domestic industry to which the petitioner belongs and the particular domestic product, commodity or article or class of domestic product, commodity or article being prejudiced;(2) The number of persons employed, the total capital invested, the production and sales volume, and the aggregate production capacity of the domestic industry that has been materially injured or is threatened to be materially injured or whose growth or establishment has been materially retarded or prevented;(3) The name and address of the known importer, exporter, or foreign producer, the country of origin or export, the estimated aggregate or cumulative quantity, the port and the date of arrival, the import entry declaration of the imported product, commodity or article, as well as the nature, the extent and the estimated amount of the subsidy thereon; and(4) Such other particulars, facts or allegations as are necessary to justify the imposition of countervailing duty on the imported product, commodity or article.

b. Procedure (Sec 1B)A petition for the imposition of a countervailing duty shall be considered to have been made 'by or on behalf of the domestic industry' if it is supported by those domestic producers whose collective output constitutes more than fifty percent (50%) of the total production of the like product produced by that portion of the domestic industry expressing either support for or opposition to the application. However, an investigation shall be initiated only when domestic producers supporting the application account for at least twenty-five percent (25%) of the total production of the like product produced by the domestic industry. In cases involving an exceptionally large number of producers, degree of support or opposition may be determined by using statistically valid sampling techniques or by consulting their representative organizations. Within ten (10) days from his receipt of the petition or information, the Secretary shall review the accuracy and adequacy of the information or evidence provided in the petition to determine whether there is sufficient basis to justify the initiation of an investigation. If there is no sufficient basis to justify the initiation of an investigation, the Secretary shall dismiss the petition and shall properly notify the Secretary of Finance, the Commissioner of Customs and other parties concerned regarding such dismissal. The Secretary shall extend legal, technical and other assistance to the concerned domestic producers and their organizations at all stages of the countervailing action.

Notice to the sec. of Finance. (sec. 1, C) Notice to and answer of interested. (sec.1, D) Preliminary determination.(sec. 1, E)

c. Termination of Investigation by the Secretary or Commission (Sec 1F)The Secretary or the Commission as the case may be, shall motu proprio terminate the investigation at any stage of the proceedings if the amount of subsidy is de minimis as defined in existing international trade agreements of which the Republic of the Philippines is a party; or where the volume of the subsidized imported product, commodity or article, actual or potential, or the injury is negligible.


d. Public Notices and Consultation Proceedings (Sec 1L)The Secretary or the Commission, as the case may be, shall make public notices and conduct consultation with the government of the exporting country when:

(1) Initiating an investigation;(2) Concluding or suspending an investigation;(3) Making a preliminary or final determination;(4) Making a decision to accept an undertaking or the termination of an undertaking; and(5) Terminating a definitive countervailing duty. e. Voluntary Undertaking (Sec 1M)

When there is an offer from any exporter of subsidized imports to revise its price, or where the government of the exporting country agrees to eliminate or limit the subsidy or take other measures to that effect, the Commission shall determine if the offer is acceptable and make the necessary recommendation to the Secretary. If the undertaking is accepted, the Secretary may advise the Commission to terminate, suspend or continue the investigation. The Secretary 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 presence of a subsidy or material injury. In the event of a positive finding of subsidization and material injury, the undertaking will continue, consistent with its terms and the provisions of this section.

v. Countervailing Duty Sec 1(O). Imposition of Countervailing Duty. The Secretary shall, within ten (10) days from receipt of an affirmative final determination by the Commission, issue a department order imposing the countervailing duty on the subsidized imported product, commodity or article. He shall furnish the Secretary of Finance with the copy of the order and request the latter to direct the Commissioner of Customs to cause the countervailing duty to be levied, collected and paid, in addition to any other duties, taxes and charges imposed by law on such product, commodity or article.

a. Amount (Sec 1O)In case of an affirmative final determination by the Commission, the cash bond shall be applied to the countervailing duty assessed. If the cash bond is in excess of the countervailing duty assessed, the remainder shall be returned to the importer immediately: Provided, That no interest shall be payable by the government on the amount to be returned. If the cash bond is less than the countervailing duty assessed, the difference shall not be collected.If the order of the Secretary is unfavorable to the petitioner, the Secretary shall, after the lapse of the period for appeal to the Court of Tax Appeals, issue through the Secretary of Finance a department order for the immediate release of the cash bond to the importer.

b. Duration and Review of Countervailing Duty (Sec 1P)As a general rule, any imposition of countervailing duty shall remain in force only as long as and to the extent necessary to counteract a subsidization which is causing or threatening to cause material injury. However, the need for the continued imposition of the countervailing duty may be reviewed by the Commission when warranted, motu proprio or upon direction of the Secretary.Any interested party may also petition the Secretary for a review of the continued imposition of the countervailing duty: Provided, That at least six (6) months have elapsed since the imposition of the countervailing duty, and upon submission of positive information substantiating the need for a review. Interested parties may request the Secretary to examine: (1) whether the continued imposition of the countervailing duty is necessary to offset the subsidization; and/or (2) whether the injury will likely continue or recur if the countervailing duty is removed or modified.If the Commission determines that the countervailing duty is no longer necessary or warranted, the Secretary shall, upon its recommendation, immediately issue a department order terminating the imposition of the countervailing duty and shall notify all parties concerned, including the Commissioner of Customs 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.The procedure and evidence governing the disposition of the petition for the imposition of countervailing duty shall equally apply to any review carried out under this subsection. Such review shall be carried out expeditiously and shall be concluded not later than ninety (90) days from the date of the initiation of such a review.

c. Judicial ReviewAny interested party who is adversely affected by the department order of the Secretary on the imposition of the countervailing duty may file with the Court of Tax Appeals a petition for review of such order within thirty (30) days from his receipt of notice thereof: Provided, however, That the filing of such petition for review shall not in any way stop, suspend or otherwise toll the imposition and collection of the countervailing duty on the imported product, commodity or article. The petition for review shall comply with the same requirements, follow the same rules of procedure, and be subject to the same disposition as in appeals in connection with adverse rulings on tax matters to the Court of Tax Appeals.

B. Anti-Dumping Act of 1999 (RA 8752, as amended by RA 7843) – Adriani . E l e m e n t s

a. Whenever any product, commodity or article of commerce imported into the Philippines;b. at an export price less than its normal value in the ordinary course of trade for the like product,

commodity or article destined for consumption in the exporting country;c. is causing or is threatening to cause material injury to a domestic industry, or materially retarding

the establishment of a domestic industry, or materially retarding the establishment of a domestic industry producing the like product.

i i . D e t e r m i n a t i o n o f I n j u r y The presence and extent of material injury to the domestic industry, as a result of the dumped imports shall be determined on the basis of positive evidence and shall require an objective examination of, but shall not be limited to the following:

(1) The rate of increase and amount of imports, either in absolute terms or relative to production or consumption in the domestic market;(2) The effect of the dumped imports on the price in the domestic market for like product, commodity or article, that is, whether there has been a significant price undercutting by the dumped imports as compared with the price of like product, commodity or article in the domestic market, or whether the effect of such imports is otherwise to depress prices to a significant degree or prevent price increases, which otherwise would have occurred, to a significant degree; and(3) The effect of the imports on the domestic producers or the resulting retardation of the establishment of a domestic industry manufacturing like product, commodity or article, including an evaluation of all relevant economic factors and indices having a bearing on the state of the domestic industry concerned, such as, but not limited to, actual or potential decline in output, sales, market share, profits, productivity, return on investments, or utilization of capacity; factors affecting domestic prices; the magnitude of dumping; actual and potential negative effects on cash flow, inventories, employment, wages, growth, and ability to raise capital or investments.

i i i . I n v e s t i g a t i o n a . R e q u i r e m e n t s

1. Written application from any person representing an industry.2. Evidence of dumping, injury and causal link between the dumping and injury.3. Must contain the following:


A. Identity of the applicant and a description of the volume and the value of the domestic production of the like product of the applicant.

B. Complete description of the alleged dumped product, the name of the country of origin or export under consideration, the identity of each known exporter or foreign producer, and a list of known persons importing the product under consideration.

C. Information on the normal value of the product under consideration in the country of origin or export.

D. Information on the evolution of the volume of the alleged dumped imports, the effect of these imports on the price of the like product in domestic market, and the consequent impact of the imports on the domestic industry.

b . P r o c e d u r e1. Upon receipt of a written application2. From any person representing an industry3. Include evidence of dumping, injury and causal link between the dumping and injury4. Be filed with the Sec. of Trade and Industry (for non-agricultural products) or Sec. of

Agriculture (for agricultural products)5. Post a surety bond as required by the Secretary.6. The Sec., within 5 working days from receipt of the application, examines the accuracy and

adequacy of the petition to determine whether there is sufficient evidence to justify the initiation of investigation. If no sufficient evidence to justify the initiation of the investigation, the Sec. shall dismiss the petition and notify the Secretary of Finance, the Commissioner of Customs, and other parties concerned regarding such dismissal.

Upon receipt of the application, the Sec. shall notify the following:A. Sec. of Finance - then later notify the Customs CommissionerB. Government of the Exporting CountryC. Within 2 days from initiation of the investigation and having notified the exporting

country, the Sec. shall notify all interested parties and require them to submit contrary evidences and information within 30 days.

7. Within 30 days from the receipt of the answer, the Sec. shall make a preliminary determination of the application for the imposition of the anti-dumping duty.The preliminary finding and its records shall, within 3 days be submitted to the Customs Commission for investigations.

c . T e r m i n a t i o nThe Secretary or the Commission, as the case may be, shall motu proprio terminate the investigation at any stage of the proceedings if the provisionally estimated margin of dumping is less than two percent (2%) of export price or the volume of dumped imports or injury is negligible. The volume of dumped imports from a particular country shall normally be regarded as negligible if it accounts for less than three percent (3%) of the imports of the like article in the Philippines unless countries which individually account for less than three percent (3%) of the imports of the like article in the Philippines collectively account for more than seven percent ( 7%) of the total imports of that article.

The Commission shall complete the formal investigation and submit a report of its findings, whether favorable or not, to the Secretary within one hundred twenty (120) days from receipt of the records of the case.In case of a negative finding by the Commission, the Secretary shall issue, after the lapse of the period for the petitioner to appeal to the Court of Tax Appeals, through the Secretary of Finance, an order for the Commissioner of Customs for the immediate release of the cash bond to the importer. In addition, all the parties concerned shall also be properly notified of the dismissal of the case.


d . P u b l i c N o t i c eThe Secretary or the Commission shall inform in writing all interested parties on record and, in addition, give public notices by publishing in two (2) newspapers of general circulation when:1. Initiating an investigation;2. Concluding or suspending investigation;3. Making any preliminary or final determination whether affirmative or negative;4. Making a decision to accept or to terminate an undertaking.5. Terminating a definitive anti-dumping duty.

e . V o l u n t a r y U n d e r t a k i n gAnti-dumping investigation may be suspended or terminated without the imposition of provisional measures or anti-dumping duties upon receipt of the Commission of a satisfactory voluntary price undertaking executed by the exporter or foreign producer under oath and accepted by the affected industry that he will increase his price or will cease exporting to the Philippines at a dumped price, thereby eliminating the material injury to the domestic industry producing like product. Price increases under such undertakings shall not be higher than necessary to eliminate the margin of dumping.

i v . A n t i - D u m p i n g D u t y a . A m o u n t

After formal investigation and affirmative finding of the Tariff Commission (hereinafter referred to as the Commission), shall cause the imposition of an anti-dumping duty equal to the margin of dumping on such product, commodity or article and on like product, commodity or article thereafter imported to the Philippines under similar circumstances, in addition to ordinary duties, taxes and charges imposed by law on the imported product, commodity or article.If the normal value of an article cannot be determined, the provisions for choosing alternative normal value under Article VI of GATT 1994 shall apply.

b . D u r a t i o nThe imposition of an anti-dumping duty shall remain in force only as long as and to the extent necessary to counteract dumping which is causing or threatening to cause material injury or material retardation of the establishment of such industry.The duration of the definitive anti-dumping duty shall not exceed five (5) years from the date of its imposition (or from the date of the most recent review if that review has covered unless the Commission has determined in a review initiated before that date on their own initiative or upon a duly substantiated request made by or on behalf of the domestic industry within a reasonable time period prior to the termination date that the termination of the anti-dumping duty will likely lead to the continuation or recurrence of dumping and injury.

c . J u d i c i a l R e v i e wAny interested party in an anti-dumping investigation who is adversely affected by a final ruling in connection with the imposition of an anti-dumping duty may file with the Court of Tax Appeals, a petition for the review of such ruling within thirty (30) days from his receipt of notice of the final ruling: Provided, however, That the filing of such petition for review shall not in any way stop, suspend, or otherwise hold the imposition or collection, as the case may be, of the anti-dumping duty on the imported product, commodity or article. The rules of procedure of the court on the petition for review filed with the Court of Tax Appeals shall be applied.

C. Safeguard Measures Act (RA 8800) – GeloPurpose (Sec 2)

To promote the competitiveness of domestic industries and producer based on sound industrial and agricultural development policies, and technical resources.

To provide safeguard measures to protect domestic industries and producers from increased imports, which caused or threaten to cause serious injury to those domestic industries and producers


Sec. 3. Scope of Application – This Act shall apply to products being imported into the country irrespective of source.

Sec. 4. Definitions“Commission" shall refer to the Tariff Commission;“Consumers" shall refer to natural person or organized consumer groups who are purchaser, lessees, recipient, or prospective purchasers, lessees, recipients of consumer products, services or credit;“Secretary" shall refer to either the Sectary of the department of Trade and Industry in the case of non-agricultural products or the Secretary of the Department of Agriculture in the case of agricultural products;“Serious injury" shall mean a significant impairment in the position of a domestic industry after evaluation by competent authorities of all relevant factor of an objective and quantifiable nature having a bearing on the situation of the industry concerned, in particular ,the rate and amount of the increase in imports of the products concerned in absolute and relative terms the share of the domestic market take by increased imports, change in level of sales, production, productivity, capacity utilization, profit and losses, and employment;“Trigger volume" is the price benchmark for applying the special safeguard measure; and“Trigger price" is the volume benchmark for applying the special safe guard measure.

i. Elements 1. A positive final determination of the Tariff Commission that a product is being imported in to the

country in increased quantities,2. The importation is absolute or relative3. It is to be a substantial cause of serious injury or threat to domestic goods

Sec. 5. Condition the Application of General Safeguard Measure- The Secretary shall apply a general safeguard measure upon a positive final determination of the Commission that a product is being imported in to the country in increased quantities, whether absolute or relative to the domestic production, as to be a substantial cause of serious injury or threat thereof to the domestic industry; however in the case of non-agricultural products; the Secretary shall first establish that the application of such safeguard measure will be in the public interest.

ii. Determination of Injury iii. Investigation

a. Requirementsb. Procedurec. Terminationd. Notice

iv. Definitive Measures a. Types of Definitive Measuresb. Durationc. Judicial Review

Sec. 6. Initiation of Action Involving General Safeguard Measure - Any person, whether natural or juridical, belonging to or representing a domestic industry may file with the secretary a verified petition requesting that action be taken to remedy the serious injury or prevent the threat thereof to the domestic industry caused by increased imports of the product under consideration.

Q: Who can file a petition for general safeguard measure?

A:1. Natural2. Juridical persons


As long as it belongs or it represents a domestic industry

3. The Secretary (Sec. 6, par. 3)a. Upon request by the Presidentb. Upon resolution of the House or Senate Committee on Agriculturec. House or Senate Committee on Trade and Commerced. Motu proprio, if there is evidence that increased imports of the product under

consideration are a substantial cause of the threatening to substantially cause, serious injury to the domestic industry.

The petition shall include documentary evidence supporting the facts that are essential to establish:

1. An increase in import of like or directly competitive products;2. The existence of serious injury or threat thereof to the domestic industry ; and3. The causal link between the increased imports of the product under consideration and the serious injury

or threat thereof.

Q: What should be included in the petition?A: See. Sec. 6, par. 2

The sectary shall review the accuracy and adequacy of the evidence adduced in the petition to determine the existence of a prima facie case that will justify the initiation of a preliminary investigation within five (5) day from receipt of the petition.

The Sectary may also initiate action upon the request of the President; or resolution of the House or Senate Committee on Agriculture, or house or Senate Committee on Trade and Commerce.

In the absence of such a petition, the Secretary may, motu proprio, initiate a preliminary safeguard investigation if there is evidence that increased imports of the product under consideration are a substantial cause of the threatening to substantially cause, serious injury to the domestic industry.

The Secretary may extend legal, technical and other assistance to the concerned domestic producer and their organization at all stages of the safeguard action

Sec. 7. Preliminary Determination - Not later than thirty (30) days from receipt of the petition or a motu proprio initiation of the preliminary safeguard investigation, the Secretary shall on the basic of the evidence and submission of the interested parties, make a preliminary determination that increased imports of the product under consideration are a substantial cause of or threaten to substantially cause, serious injury to the domestic industry. In the process of conducting a preliminary determination the Secretary shall notify the interested parties and shall require them to submit their answer within five (5) working days from receipt of such notice .The notice shall be deemed received five (5) working days from the date of transmittal to the respondent or appropriate diplomatic representative of the country of exportation or origin of the imported product under consideration.

B. PROCEDURE

1. Filing of petition or motu proprio initiation of the preliminary safeguard investigation (Sec. 7)2. Not later than 30 days from receipt, the Secretary shall make a preliminary determination that the

increased imports of the product under consideration are a substantial cause of or threaten to substantially cause, serious injury to the domestic industry (Sec. 7)

3. The Secretary shall notify and require the INTERESTED PARTIES within 5 working days from receipt of such notice to submit their answer. (Sec. 7)

4. Upon positive finding that it is the cause of serious injury to domestic products, the Secretary shall transmit its records to the Commission for immediate formal investigation.


5. Within 5 working days from receipt of advice from Secretary, the Commission shall publish the notice of commencement of investigation and public hearing (to afford opportunity to interested parties to adduce evidence) (Sec. 9)

6. Interested parties are given 15 days to adduce evidence after initiation of investigation. (Sec. 9)7. Commission shall report back to the Secretary:

a. Within 120 calendar days from receipt of the referral by the Secretaryb. Within 60 days, if certified by the Secretary as urgent (Sec. 9)

8. If the Commission make an affirmative determination of injury or threat thereof individual comments regarding actions such persons and entities intend to take to facilitate positive adjustment to import competition shall be submitted to the Commission by any:

a. Firm in the domestic industryb. Certified or recognized union or group of workers in the domestic industryc. Local communityd. Trade association representing the domestic industrye. Other person or group of persons (Sec. 11)

9. The Secretary shall issue a written instruction to the heads of the concerned government agencies to implement the appropriate general safeguard measure as determined by the Secretary within fifteen (15) days from receipt of the report. (Sec. 13)

10. In the event of a negative final determination, or if the cash bond is in excess of the definitive safeguard duty assessed, the Secretary shall immediately issue, through the Secretary of Finance, a written instruction to the Commissioner of Customs, authorizing the return of the cash bond or the remainder thereof, as the case may be, previously collected as provisional general safeguard measure within ten (10) days from the date a final decision has been made (Sec. 13)

The Secretary shall not accept for consideration another petition from the same industry, with respect to the same imports of the product under consideration within one (1) year after the date of rendering such a decision.

When information is not applied within the above time limit set by the Secretary or if the investigation is significantly impeded, decision will be based on the facts derived from the evidence at hand.

Q: What is the effect if the interested parties failed to submit their answers?

A: The decision of the Secretary shall be based on the facts derived from the evidence at hand (Sec. 7, par. 2)

Upon a positive preliminary determination that increased importation of the product under consideration is a substantial cause of, or threatens to substantially cause serious injury to the domestic industry the secretary shall without delay transmit its records to the Commission for immediate formal investigation.

Sec. 8. Provisional Messages - In critical circumstances, which would be difficult to repair, and pursuant to a preliminary determination that increased import are a substantial cause of, or threaten to substantially cause, serious injury to the domestic industry, the Secretary shall immediately issue, through the Secretary of finance, a written instruction the Commissioner of Customs authorizing the imposition of a provisional general safeguard measure.

Such measure shall take the form of a tariff increase, either ad valorem or specific, or both, to be paid through a cash bond set at a level sufficient to redress or present injury to the domestic injury provided, however, that in the case of agricultural products where the tariff increase may not be sufficient to redress or to prevent serious injury to the domestic producers or producers, a quantitative restriction may be set. The cash bond shall be deposited with a government depository bank and posted the bond. The duration of the provisional measure shall not exceed two hundred (200) days from the date of imposition during which period the requirements of the subsequent Sec. of this Act on the initiation of a formal investigation notification and consultation shall have been met provided, That the duration any provisional measure shall be counted as part of the initial period and any extension, of the definitive final safeguard measure.


When the provisional safeguard measure is in the form of a tariff increase, such increase shall not be subject or limited to the maximum level of the tariff as set forth in Sec. 401 (a) of the Tariff and Customs Code of the Philippines.

Sec. 9. Formal Investigation - within five (5) working days from receipt of the of the request from the Secretary, the Commission shall publish the notice of the commencement of the investigation, and public hearing which shall afford interested parties and consumers and opportunity to be present or to present evidence, to respond to the presentation of other parties and consumers, and otherwise be heard. Evidence and position with respect to the importation of the subject article to the Commission within fifteen (15) days after the initiation of the investigation.

The Commission shall complete its investigation and submit its report to the Secretary within one hundred twenty (120) calendars days from receipt of the referral by the Secretary, except when the Secretary certifies that then same is urgent, in which case the Commission shall complete the investigation and submit the report to the Secretary within sixty (60) days.

Sec. 10. Inspection of Evidence - The Commission shall make available for inspection by interested parties, copies of evidence submitted on or before the relevant due: Provided, however, that any information which is by nature confidential or which is provided on a confidential basis, shall upon cause being shown, not be disclosed without permission of the party submitting it. Parties providing confidential information may be requested to furnish non-confidential summaries thereof or if such parties indicate that such information cannot be summarized, the reasons

Why a summary cannot be provided: provided, further, that if the Commission finds that a request for confidentiality is not warranted and if that party concerned is either unwilling to make the information public or to authorize its disclosure in generalized or summary from the Commissions may disregard such information unless it can be demonstrated to its satisfaction from appropriate sources that the information is correct.

Sec. 11. Adjustment plan - In the course of its investigation, the Commission shall issue an appropriate notice to representatives of the concerned domestic industry or other parties to submit an adjustment plan to import competition, within forty-five (45) days upon receipt of the notice, except when the Secretary certifies of that the same is urgent, in which case the adjustment plan must be submitted within thirty (30) days.

If the Commission make an affirmative determination of injury or threat thereof individual comments regarding actions such persons and entities intend to take to facilitate positive adjustment to import competition shall be submitted to the Commission by any (a) firm in the domestic industry, (b) certified or recognized union or group of workers in the domestic industry, (c) local community, (d) trade association representing the domestic industry, or (e) other person or the group of person.

Sec. 12. Determination of Serious Injury or Threat Thereof -In reaching a positive determination that the increase in the importation of the product under consideration is causing serious injury or threat thereof to a domestic industry producing like products or directly competitive products, all relevant factors having a bearing on the situation of the domestic industry shall be evaluated. These shall include, in particular, in ports of the products concerned in absolute and relative terms, the shared of the domestic market taken by the increased imports, and changes in the level of sales production, productivity, capacity and employment.

Such positive determination shall not be made unless the investigation demonstrates, on the basis of objective evidence, the existence of the causal link between the increased imports of the product under consideration con serious injury or threat thereof to the domestic industry. When factors other than increased import are causing injury, such injury shall not be attributed to increased imports other than increased imports are causing jury shall not be attributed to increased imports.

TYPES OF DEFINITIVE MEASURES

Sec. 13. Adoption of Definitive Measure - Upon its positive determination the Commission shall recommend to the Secretary appropriate definitive measures, in the form of


(a) An increase in, or imposition of, any duty on the imported product;(b) A decrease in or the imposition of a tariff-rate quota (MAV) on the product;(c) A modification or imposition of any quantitative restriction on the importation of the product into

the Philippines;(d) One or more appropriate adjustment measure, including into the provision of trade adjustment

measure, including the provision of trade adjustment assistance;(e) Any combination of action described in subparagraph (a) to (d).

The Commission may also recommend other actions, including the initiation of international negotiation to address the underlying cause of the increase of imports of the product, to alleviate the injury or threat thereof to the domestic industry, and to facilitate positive adjustment to import competition.

The general safeguard measure shall be limited to the extent of redressing or pre venting the injury and to facilitate adjustment by the domestic industry from the adverse effects directly attributed to the increased imports Provided, however, that when quantitative import restriction are used, such measure shall not reduce the quantity of imports below the average imports for the three (3) preceding representative years, unless clear justification is given that a different level is necessary to prevent or remedy a serious injury.

Sec. 13, par. 2. Other Definitive measures

(a) Initiation of international negotiation to address the underlying cause of the increase of imports(b) Facilitate positive adjustment to import competition

A general safeguard measure shall not be applied to a product originating from a developing country if its share of total imports of the product is less than three percent (3%) provided, however, The developing countries with less than three percent (3%) share collectively account for not more than nine percent (9%) of the total imports.

Q: What is the exception to the general safeguard measure?

A: Products originating from a developing country if its share of total imports of the product is less than 3%

Q: What is the exception to the exception?

A: The developing countries with less than 3% share collectively account for more than 9% of the total imports.

The decision imposing a general safeguard measure, the (1) year, shall be reviewed at regular intervals for purpose of liberalizing or reducing its intensity the industry benefiting from the application of a general safeguard measure shall be required to show positive adjustment within the allowable be terminate where the benefiting industry fails to show any improvement, as may be determined be by the Secretary.

The Secretary shall issue a written instruction to the heads of the concerned government agencies to implement the appropriate general safeguard measure as terminated by the Secretary within fifteen (15 days from receipt of the report.

In the event of a negative final determination, or if the cash bond in excess of the definitive safeguard duty assessed, the Secretary shall immediately issue, through the Secretary of Finance, a written instruction to the Commissioner of Customs authorizing the return of the cash bond or the remainder thereof, as the cash may be, previously collected provisional general safeguard measure within in the event of a negative final determination, or if the cash bond is in excess of the definitive safeguard duty assessed, the Secretary shall immediately issue, through the Secretary of Finance, a written instruction to the Commissioner of Customs, authorizing the return of the cash bond or the remainder thereof, as the case may be, previously collected as provisional general safeguard measure within ten (10) days from the date a final decision has been made: Provided, That the government shall not be liable for any interest on the amount to be returned. The Secretary shall not accept for


consideration another petition from the same industry, with respect to the same imports under consideration within one (1) year after the date of rendering such a decision.

When the definitive safeguard measure is in the form of a tariff increase, such increase shall be not subject to the maximum levels of tariff as set forth in Sec. 401 (a) of the Tariff and Customs Code of the Philippines.

Sec. 14. Contents of the Report by the Commission. - Based on its findings, the Commission shall submit to the Secretary: (a) the investigation report; (b) the proposed recommendations; (c) a copy of submitted adjustment plan; and (d) the commitments made by the domestic industry to import competition.

The report shall also include a description of the short and long-term effects of the affirmative or negative recommendation, as the case may be, on the petitioner, the domestic industries, the consumers, the workers, and the communities where production facilities of such industry are located.

The Commission, after submitting the reports Secretary shall make it available to the public except confidential information obtained under Sec. 10 the publish a summary in two (2) newspapers of general circulation.

DURATION

Sec. 15. Limitations on Actions. - The duration of the period of an action taken under the General Safeguard Provisions of this Act shall not exceed four (4) years. Such period shall include the period, if any, in which provisional safeguard relief under Sec. 8 was in effects.

The effective period of any safeguard measure, including any extensions thereof under Sec. 19 may not, in the aggregate, exceed ten (10) years.

1. Any additional duty, or any duty imposed under this Sec. may be specific and/or ad valorem. It shall be in the amount necessary to prevent or redress or remedy the injury to the domestic industry;

2. If the quantitative restriction is used, such measure shall not reduce the quantity of imports below the level of a recent period which shall be the average of imports in the last three (3) representative years of which the statistics are available, unless clear justification is given that a different levels is necessary to prevent or remedy serious injury;

3. An action described in Sec. 13 (a), (b), or (c) that has an effective period of more than one (1) year shall be phased down at regular intervals within the period in which the action is in effect;

4. Within two (2) years after the expiration of the action, the Secretary shall not accept any further petition for the same article: Provided, however, That a safeguard measure with a duration of one hundred eighty (180) days or less may be applied again to the same product if:

a. At least one (1) year has elapsed since the date of introduction of the safeguard measure; and

b. Such measure has not been applied on the same product more than twice in the five (5) year period immediately preceding the date of introduction of the measure.

Sec. 16. Monitoring – So long as any action taken under Sec. 13 remains in effect, the Commission shall monitor developments with respect to the domestic industry, including the progress and specific efforts made by workers and firms in the domestic industry to make a positive adjustment to import competition.

(1) If the initial application of action taken under Sec. 13 exceeds three (3) years, or if an extension of such action exceeds three (3) years, the Commission shall submit to the Secretary a report on the results of the monitoring, not later than the date which is the midpoint of the initial period, and of each such extension, during which the action is in effect.

(2) The Commission in the preparation of each monitoring report shall conduct a hearing at which interested parties shall be given reasonable opportunity to be present, to present evidence, and to be heard.

Sec. 17. Notice of General Safeguard Measure.- The Secretary shall notify the concerned Committee on Safeguards of the World Trade Organization:


(a) When initiating an action relating to serious injury or threat thereof and the reasons for it.;

(b) When adopting a provisional general safeguard measure following a positive preliminary determination; and

(c) When applying or extending a definitive general safeguard measure following a positive final determination.

Sec. 18. Reduction, Modification, and Termination of Action. - Action taken under Sec. 13 may be reduced, modified, or terminated by the Secretary only after:

(a) Taking into account the results of the monitoring indicated in the report submitted by the Commission under Sec. 16, he determines that:

(i) No adequate efforts to make a positive adjustment to import competition have been undertaken by the domestic industry; and

(ii) Changed economic circumstances have impaired the effectiveness of action taken under Sec. 13.

(b) A majority of the representative of the domestic industry submit to the Secretary, at least one (1) year before the expiration, a petition requesting such reduction, modification, or termination on the basis that the domestic industry has made a positive adjustment to import competition.

If reduction, modification, or termination of action is being requested for an action that has been effect for three (3) year or less, the petitioning industry shall submit its request to the Secretary. The Secretary shall refer the request to the Commission, which shall conduct an investigation following the producers under Sec. 9, to be completed within sixty (60) days from receipt of the request. The Commission shall submit a report to the Secretary who shall then take action after taking into consideration conditions under Sec. 16(1) and (2), not later than thirty (30) days after receipt of the Commission’s report.

DURATION for Extension and Re-application of Safeguard Measures

Sec. 19. Extension and Re-application of Safeguard Measure. – (1) Subject to the review under Sec. 16, an extension of the measure may be requested by the petitioner if the action continues to be necessary to prevent or remedy the serious injury and there is evidence that domestic industry is making positive adjustment to import competition.

(2) The petitioner may appeal to the secretary at least ninety (90) days before the expiration of the measure for an extension of the period by stating concrete reasons for the need thereof and a description of the industry’s adjustment performance and future plan. The secretary shall immediately refer the request to the Commission. Following the procedures required under Sec. 9, the commission shall then submit a report to the Secretary not later than sixty (60) days from its receipt of the request Within seven (7) days from receipt of the report, the secretary shall issue an order granting or denying the petition In case an extension is Granted. The same shall be more liberal that the initial application.

Sec. 20. Evaluation of Effectiveness of Action – After termination of any action under Sec. 13, the Commission shall evaluate the effectiveness of the actions taken by the domestic industry in facilitating positive adjustment to import competition

The Commission shall hold a public hearing on the effectiveness of the action at which all interested parties shall be afforded opportunity to present evidence or testimony.

NOTE: HINDI NA YATA KASALI YUNG SEC. 21 – 28, proceed to Sec. 29 for JUDICIAL REVIEW AND PENALTY


CHAPTER IV: SPECIAL PROVISIONS

Sec. 29. Judicial Review. - Any interest 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 disqualification from holding public office.


Laws on Protection of Domestic IndustriesCountervailing Duties on Imported

Subsidized Products (RA 8751)Anti-Dumping Act of 1999

(RA 8752)Safeguard Measures Act

(RA 8800)Elements a.Subsidy

- General- Specific

b.Injuryc.Causal link

a.Priceb.Injuryc.Causal Link

a.Quantity/Volumeb.Injuryc.Causal Link

Determination Injury:- Volume of subsidized imports- Effect of subsidized imports on

prices for the like product in the domestic market

- Effect of subsidized imports on domestic producers of the like product

General Subsidy: granted by law or govt in the country of origin extends financial contribution to the producer, manufacturer, or exporter of the imported product or there is a benefit conferred

Specific Subsidy: when the govt in the country of origin limits access to a subsidy to certain enterprises w/o valid qualification (prohibited)

Injury:- Rate of increase and

amount of imports- Effect of dumped imports

on the price for the like product in the domestic market

- Effect of the imports on the domestic producers or the resulting retardation of the establishment of a domestic industry manufacturing like product

Injury:There must be a positive determination that the importation of the product under consideration is causing serious injury or threat thereof to a domestic industry producing like products or directly competitive products.

There must be a causal link between the increased imports of the product under consideration con serious injury or threat thereof to the domestic industry

Investigation Sec of DTI: non-agri productsSec of Agri: agri products

a. Requirements Petition filed w/ the Secretary accompanied by documents stating among others:

a. The domestic industry to w/c petitioner belongs

b. # of persons employed, capital invested, etc.

c. Name and address of the known importer, exporter or foreign producer, the country of

1. Written application2. Evidence of dumping, injury and causal link between injury and the dumping3. Must contain the ff:A. Identity of the applicant and a description of the volume and the value of the domestic production of the like product of the applicant.

Filing of petition or motu proprio initiation of the preliminary safeguard investigation

Upon a positive preliminary determination that increased importation of the product under consideration is a substantial cause of, or threatens to substantially cause serious injury to the domestic industry the secretary shall without delay transmit its records to the Commission for immediate


origind. Such other particulars or facts

necessary to justify the imposition of countervailing duty

B. complete description of the alleged dumped product, the name of the country of origin or export under consideration, the identity of each known exporter or foreign producer, and a list of known persons importing the product under consideration.C. Information on the normal value of the product under consideration in the country of origin or export.D. Information on the evolution of the volume of the alleged dumped imports, the effect of these imports on the price of the like product in domestic market, and the consequent impact on the domestic industry.

formal investigation.

b. Procedure 1. File petition for the imposition of countervailing duty by or on behalf of domestic producers2. W/in 10 days from receipt of petition, Secretary whether there is sufficient evidence to justify initiation of investigation. If no basis – Sec will dismiss petition.3. Sec will notify Sec of Finance and request him to inform Customs Commissioner of the petition and instruct to secure all import entries of the subsidized product4. Sec notifies all interested parties and parties submit their answers5. W/in 20 days from receipt of answer, Sec shall make a preliminary determination on whether or not a prima facie case exists for the imposition of a provisional countervailing duty6. Upon finding of a prima facie case, the Secretary shall immediately issue, through the Secretary of Finance, a

1. Written application from any person representing an industry

2. Include any evidence of dumping, injury and causal link between the dumping and injury

3. Be filed with Sec. of DTI (Non-Agri) or Sec. of DA (Agri)

4. Post a surety bond as required by the Secretary

5. The Sec w/in 5 working days from receipt of the application, examines the accuracy and adequacy of the petition to determine whether there is sufficient evidence to justify the initiation of investigation. If no sufficient evidence to justify the initiation of the investigation, the Sec shall dismiss the petition and notify the Sec of Finance, the Commissioner of Customs, and other parties

11. Filing of petition or motu proprio initiation of the preliminary safeguard investigation (Sec. 7)

12. Not later than 30 days from receipt, the Secretary shall make a preliminary determination that the increased imports of the product under consideration are a substantial cause of or threaten to substantially cause, serious injury to the domestic industry (Sec. 7)

13. The Secretary shall notify and require the INTERESTED PARTIES within 5 working days from receipt of such notice to submit their answer. (Sec. 7)

14. Upon positive finding that it is the cause of serious injury to domestic products, the Secretary shall transmit its records to the Commission for immediate formal investigation.

15. Within 5 working days from receipt of advice from Secretary, the Commission shall publish the notice of commencement of investigation and public hearing (to afford opportunity to


written instruction to the Commissioner of Customs to collect the cash bond, in addition to the corresponding ordinary duties, taxes and other charges imposed by law on such product7. Secretary shall immediately transmit his preliminary findings together with the records of the case to the Commission for its formal investigation.

concerned regarding such dismissal

6. Within 30 days from the receipt of the answer, the Sec shall make a preliminary determination of the application for the imposition of the anti-dumping duty. The preliminary finding and its records shall w/in 3 days be submitted to the Customs for investigation.

interested parties to adduce evidence) (Sec. 9)

16. Interested parties are given 15 days to adduce evidence after initiation of investigation. (Sec. 9)

17. Commission shall report back to the Secretary:

a. Within 120 calendar days from receipt of the referral by the Secretary

b. Within 60 days, if certified by the Secretary as urgent (Sec. 9)

18. If the Commission make an affirmative determination of injury or threat thereof individual comments regarding actions such persons and entities intend to take to facilitate positive adjustment to import competition shall be submitted to the Commission by any:

a. Firm in the domestic industryb. Certified or recognized union or group

of workers in the domestic industryc.Local communityd. Trade association representing the

domestic industrye. Other person or group of persons (Sec. 11)

19. The Secretary shall issue a written instruction to the heads of the concerned government agencies to implement the appropriate general safeguard measure as determined by the Secretary within fifteen (15) days from receipt of the report. (Sec. 13)

20. In the event of a negative final determination, or if the cash bond is in excess of the definitive safeguard duty assessed, the Secretary shall immediately issue, through the Secretary of Finance, a written instruction to the Commissioner of Customs, authorizing the return of the cash bond or the


remainder thereof, as the case may be, previously collected as provisional general safeguard measure within ten (10) days from the date a final decision has been made (Sec. 13)

The Secretary shall not accept for consideration another petition from the same industry, with respect to the same imports of the product under consideration within one (1) year after the date of rendering such a decision.

c. Termination The Secretary or the Commission as the case may be, shall motu proprio terminate the investigation at any stage of the proceedings if:1. the amount of subsidy is de

minimis as defined in existing international trade agreements of which the Republic of the Philippines is a party; or

2. where the volume of the subsidized imported product, commodity or article, actual or potential, or the injury is negligible.

The Secretary or the Commission, as the case may be, shall motu proprio terminate the investigation at any stage of the proceedings if the provisionally estimated margin of dumping is less than two percent (2%) of export price or the volume of dumped imports or injury is negligible.

An action under Sec 13 (Adoption of Definitive Measures) may be reduced, modified or terminated by the Secretary if:(i) No adequate efforts to make a positive adjustment to import competition have been undertaken by the domestic industry; and

(ii) Changed economic circumstances have impaired the effectiveness of action taken under Sec. 13.

d. Public Notice The Secretary or the Commission, as the case may be, shall make public notices and conduct consultation with the government of the exporting country when:(1) Initiating an investigation;(2) Concluding or suspending an investigation;(3) Making a preliminary or final determination;(4) Making a decision to accept an undertaking or the termination of an undertaking; and(5) Terminating a definitive countervailing duty.

The Sec or the Commission shall inform in writing all interested parties on record and in addition, give public notices by publishing in two newspapers of general circulation when:1.Initiation of investigation2.Concluding or suspending

investigation3.Making any preliminary or final

determination whether affirmative or negative

4.Making a decision to accept or to terminate an undertaking

5.Terminating a definitive anti-dumping duty

The Sec shall notify the concerned Committee on Safeguards of the WTO:a. When initiating an action relating to

serious injury or threat thereof and the reasons for it;

b. When adopting a provisional general safeguard measure following a positive preliminary determination; and

c. When applying or extending a definitive general safeguard measure following a positive final determination


d. Voluntary Undertaking

When there is an offer from any exporter of subsidized imports to revise its price, or where the government of the exporting country agrees to eliminate or limit the subsidy or take other measures to that effect, the Commission shall determine if the offer is acceptable and make the necessary recommendation to the Secretary. If the undertaking is accepted, the Secretary may advise the Commission to terminate, suspend or continue the investigation. The Secretary 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 presence of a subsidy or material injury. In the event of a positive finding of subsidization and material injury, the undertaking will continue, consistent with its terms and the provisions of this section

Anti-dumping investigation may be suspended or terminated w/o imposition of provisional measures upon receipt of the Commission of a satisfactory voluntary price undertaking executed by the foreign exporter or foreign producer

Duty The Secretary shall, within 10 days from receipt of an affirmative final determination by the Commission, issue a department order imposing the countervailing duty on the subsidized imported product

Anti-dumping duty will be imposed after formal investigation and affirmative finding of the Tariff Commission

Special safeguard duty shall be imposed on agri products:1. If volume of imports of a particular

product has exceeded its trigger volume; or

2. The import price of a particular product has gone below its import price.

1. Amount Cash bond shall be applied to the countervailing duty assessed.

- If cash bond is in excess, remainder shall be returned to the importer (no interest shall be payable by the govt on the amount to be returned)

- If less, difference shall not be collected

Equal to the margin of dumping (Normal price – import price) PLUS ordinary duties, taxes and charges imposed by law on the imported product

For trigger volume:The duty to be imposed shall be appropriately set to a level not exceeding one-third of the applicable out-quota customs duty on the agricultural product under consideration in the year when it is imposed: Provided, That this duty shall only be maintained until the end of the year in which it is imposed: Provided, further,


That this duty may be reduced or terminated in special cases such as when a shortage of a particular agricultural product exists, as determined by the Secretary. (Kung anuman ang ibigsabihin, I have no idea!)

For trigger price:(a) Zero, if price difference exceeds ten

percent (10%) of the trigger price; or(b) Thirty percent (30%) of the amount by

which the price difference exceeds ten percent (10%) of the trigger price, if the said difference exceeds ten percent (10%) but is at most forty percent (40%) of the trigger price; or

(c) Fifty percent (50%) of the amount by which the price difference exceeds forty percent (40%) of the trigger price, plus the additional duly imposed under Sec. 24(b)(ii) if the said difference exceeds forty percent (40%) but is at most sixty percent (60%) of the trigger price; or

(d) Seventy percent (70%) of the amount by which the price difference exceeds sixty percent (60%) of the trigger price, plus the additional duties imposed under Sec. 24 (b) (ii) and (b) (iii), if the said difference exceeds sixty percent (60%) and is at most seventy-five percent (75%) of the trigger price; or

(e) Ninety percent (90%) of the amount by which the price difference exceeds seventy-five percent (75%) of the trigger price; plus the additional duties imposed under Sec. 24 (b)(ii), (b)((iii), and (b)(iv), if the said difference exceeds seventy-five percent (75%) of the trigger price.

2. Duration As long as and to the extent necessary to counteract a subsidization which is causing or

As long as and to the extent necessary to counteract dumping which is causing or threatening to

The effective period of any safeguard measure, including any extensions thereof may not, in the aggregate, exceed ten


threatening to cause material injury.BUT any countervailing duty shall be terminated on a date not later than 5 years from the date of its imposition (or most recent review)

cause material injury.The duration of the definitive anti-dumping duty shall not exceed 5 years from the date of its imposition (or most recent review)

(10) years.

3. Judicial Review

Any interested party who is adversely affected by a final ruling may file a petition for review with the CTA.



Types of Definitive MeasuresSec 13. Adoption of Definitive Measure – Upon its positive determination the Commission shall recommend to the Secretary appropriate definitive measures, in the form of:a.An increase in, imposition of, any duty

on the imported product;b.A decrease in or the imposition of a

tariff-rate quota (MAV) in the product;c.A modification or imposition of any

quantitative restriction on the importation of the product into the Philippines;

d.One or more appropriate adjustment measure, including into the provision of trade adjustment measure, including the provision of trade adjustment assistance;

e.Any combination of action described in subparagraph a to d.

Other definitive measures:a. Initiation of international negotiation to

address the underlying cause of the increase of imports

b. Facilitate positive adjustment to import competition

Special safeguard measure for agricultural productsSec. 21. Authority to impose the special


safeguard measure. The Sec of Agriculture shall issue a department order requesting the Commissioner of Customs, through the Secretary of Finance, to impose an addition special safeguard duty on an agricultural product, consistent with Philippine international treaty obligations, if:a.Its cumulative import volume in a given

year exceeds its trigger volume subject to the conditions state in this Act, in Sec 23; or but not concurrently; and

b.Its actual c.i.f. import price is less than that its trigger price subject to the conditions state in this Act and Sec 24.
