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Pursuant to the authority vested in the National Tobacco Administration (NTA) under Executive Order No. 246 and other laws not inconsistent herewith and in consonance with its powers to regulate/administer the tobacco industry, the following revised trading rules and regulations for leaf tobacco are hereby promulgated for the information and guidance of all concerned.

Regulation I
General Provisions

RULE 1. Definition of Terms - As used, it shall be referred to as the Revised Tobacco Trading Rules and Regulations.

a. NTA - refers to the National Tobacco Administration, a government agency created and existing under Executive Order No. 245.

b. NTA Board - refers to the NTA Board of Directors, as the policy-making Body of the Agency.

c. Administrator - refers to the Managing Head of the NTA.

d. NTA Grader - refers to the individual employed by NTA as such or any other NTA employee/official duly assigned or designated by the NTA Administrator as a Tobacco-Grader.

e. TCGP - refers to the program wherein the farmers grow tobacco and the tobacco buyers purchase the produce under a Marketing Agreement.

f. Marketing Agreement - is a contract between tobacco farmer/s and tobacco buyer/s wherein the farmer commits to sell all his produce to the latter and buyer commits to purchase all the usable tobacco produced by the tobacco farmer/s covered by Tobacco Contract Growing Program.

g. Tobacco Buyer - is a general term herein used to refer to a person or juridical entity who buys tobacco from tobacco farmers/producers and may include a Principal Buyer, Trading Center or Buying Station designated as such by its principal.

h. Principal Buyer - refers to a Tobacco Buyer who commits to purchase tobaccos bought by Trading Center or Buying Stations under TCGP.

i. Participating Firm - refers to a Tobacco Buyer, Trading Center or Buying Station who has entered into a Tobacco Contract Growing Project (TCGP) with tobacco farmers.

j. Trading Center - refers to the operator of a building or warehouse, including its accessories/facilities, used exclusively for buying, selling, baling, or handling and storing of tobacco. It may be a Principal Buyer, an independent Tobacco Buyer or one appointed/designated by a Principal Buyer.

k. Buying Station - refers to the operator of a building or warehouse including its facilities, which is used by an agent of a Principal Buyer to buy tobacco leaf directly from farmers.

l. Purchase Commitment - is a written undertaking to buy or cause to be procured a definite quantity of tobacco from NTA-registered tobacco farmers, under the TCGP.

m. Tobacco Farmer - is a person whose stock of leaf tobacco is the product of the land tilled by him personally or by management, duly registered as such with NTA.

n. Tobacco - refers to locally grown tobacco, excluding those that are redried, threshed or blended.

Rule 2. Jurisdiction and General Functions - For the effective enforcement of these Rules and Regulations, the following shall be tasked to carry out the following:

1. The NTA Board of Directors shall:

1. set policies to establish linkage with government and private institutions or agencies to seek commitment and support or compliance of the NTA Trading Rules and Regulations governing Tobacco Contract Growing Program.

2. approve plans and policies recommended by the Administrator for the effective and efficient marketing, enforcement of Trading Rules and Regulations and smooth tobacco operations.

2. The Administrator shall be primarily responsible for:

1. the effective and efficient implementation of the Revised Trading Rules and Regulations.

2. the granting of License to Trading Centers or Buying Stations to buy tobacco directly from tobacco farmers/producers under TCGP, including the renewal of said License/s upon the recommendation of the NTA Branch Managers and Marketing Department through the Deputy Administrator for Operations after compliance with the herein prescribed requirements.

Regulation II
Registration of Farmers

Rule 1. Objective - To regulate the production of tobacco and administer the needs of tobacco farmers and to zoning the tobacco growing area. A registration of tobacco farmers is necessary.

Rule 2. Who May Apply for Registration - In general, any person who intends to plant personally or thru management and sell his tobacco stocks may apply for registration in the NTA Roster of tobacco farmers.

Rule 3. Rights Conveyed by the ID Card - the ID Card issued by NTA to a Farmer/Producer shall qualify him to enter into the Marketing Agreement; Provided, That when he sells his tobacco, he shall personally present his ID Card to the Buyer thereof. It shall also qualify him to apply for production assistance and facility loans under the NTA TCGP assistance program.

Rule 4. Validity of ID Cards - A Farmer's/Producer's Registration of ID Card shall remain valid for as long as the holder possesses all the qualifications of a bonafide tobacco farmer as defined herein and none of its disqualifications, or until otherwise revoked by the Administrator for cause.

Regulation III
Trading of Leaf Tobacco

Rule 1. The following are authorized to purchase Virginia leaf tobacco from NTA-registered farmers/producers:

a. Participating Firms or Principal Buyers who are either Exporters, Manufacturers, Redriers or Processors with a TCGP of a minimum total purchase commitment of 1.5 million kilos.

b. A Trading Center or Buying Station, as agent of a Principal Buyer or accredited/affiliated with same, to purchase tobacco directly from tobacco farmers. Provided, That such designated Trading Center or Buying Station must have a Marketing Agreement of not less than 250,000 kilos.

c. Trading Center operating as a company Branch of a Principal Buyer to buy all the contracted tobacco produced by farmer-cooperators under TCGP agreement/s of not less than 250,000 kilos.

d. Independent Trading Centers having tobacco contract-growing projects directly with tobacco farmers having a separate purchase commitment of not less than 500,000 kilos and without a marketing tie-up or designation/appointment from a Principal Buyer.

Rule 2. Time, Place and Duration of Trading - The buying of tobacco between Tobacco Buyers and Registered Tobacco Farmers shall be done only during business hours at above places enumerated in Rule I during the period beginning the month of February until all tobacco produce of farmers/producers under TCGP are purchased unless otherwise determined or changed by the NTA Administrator.

However, trading at Barangay level may be allowed, subject to the following conditions:

1. Written request by the farmer or a Participating Firm to the NTA Administrator;

2. An NTA Grader must accompany and supervise tobacco buying;

3. Duly calibrated weighing scale must be used;

4. All necessary documents must be duly accomplished, such as Purchase Invoice Vouchers (PIVs), tobacco, tags, etc.

Rule 3. The Tobacco Buyers shall notify NTA the schedules of delivering/buying and transporting of farmers produce to the Trading Center or Buying Stations designated/appointed by the Principal Buyers. No Buying Station or Trading Center or any Buyer shall buy tobacco from tobacco farmers who are not covered by their respective TCGP.

Rule 4. Classification and Baling of Tobacco - Registered Farmers/Producers, intending to sell their tobacco, before delivering their produce to the tobacco Buying Station or Trading Center, shall first classify/grade their tobacco according to the NTA standard grading system, tie them into butts or bundles of about 25 to 30 leaves each and bale or roll them in jute sacks, if possible.

Rule 5. Tobacco Graders - During tobacco buying, a knowledgeable and skilled Tobacco Grader of the NTA, using the official standard grades and rules prescribed herein for tobacco, shall be deployed/assigned to NTA-registered Trading Centers/Buying Stations who shall see to it that the grading/classification by the Buyer conforms with the NTA leaf grading system. The Buyer shall also assign/deploy its own Tobacco Grader in such Buying Station/Trading Center. If a Principal Buyer sets up its own Branch as Trading Center, NTA shall likewise deploy a Tobacco Grader thereat, in case of disagreement in grading between the farmer and the Buyer, the NTA Tobacco Grader shall mediate/arbitrate taking into consideration the Rules on Mediation, Arbitration and Review under Rule IV. If this fails, a final arbitration shall be done by a Committee composed of member/s from PATDA, NTA, National Association of Tobacco Cooperatives and the farmer/s.

Rule 6. Pricing of Tobacco Leaf - The pricing of tobacco leaf shall be determined and agreed upon by the Farmers and Tobacco Buyers before the start of tobacco season and upon the execution and signing of the Marketing Agreement. Standard tobacco prices agreed herein apply to TCGP-farmer cooperators Farm-gate prices or buying prices of Principal Buyers and other Tobacco Buyers and Trading Centers/Buying Stations shall be the same at all times. Final grading and pricing shall be concluded at the farmers' level.

Rule 7. Requirements Before Buying - Before buying tobacco, a Tobacco Buyer shall:

a. obtain from the NTA License to Buy Tobacco. The following documents shall support an Application to Buy Tobacco:

1. TCGP Agreement/Purchase Commitment (MOA) and/or Marketing Agreement;

2. Appointment/Designation by Principal Buyer as Trading Center or Buying Station to buy tobacco under its respective TCGP;

3. Photocopy of its Articles of Incorporation or Articles of Partnership duly registered with the Securities and Exchange Commission, if the applicant is a corporation or partnership; and in case of an individual, his biodata information sheet, Residence Certificate, and Business Trade Name, if new;

4. A copy of the latest audited financial report of his operations and/or certified copies of his Income Tax Return for the last two (2) years, if new: for the previous year, if renewal; and other convincing proof of his financial capacity to engage in tobacco trading as a Buying Station/Trading Center/Buyer, if required;

5. Proof of capacity/ability to buy at least 500,000 kilos as independent Trading Center or 250,000 kilos as Trading Center/Buying Station of a Principal Buyer;

6. Vicinity or location plan of the proposed Buying Station/Trading Center, if new.

7. Photostat copies of L-3; L-3 ½ or L-3R issued by BIR;

8. Floor plan of the proposed Buying Station/Trading Center/Buyer indicating its total area and the location and dimensions of the different service areas, if new.

9. Bond or Financial Guarantee of Principal Buyer, if necessary;

10. Payment/Official Receipt of the required NTA license fees as approved by the NTA Board. Obtain all prescribed trading forms (e.g. Invoice/Receipt/, Purchase/Sales Books, Tobacco tags/ and register them with NTA and BIR;

b. submit to the NTA Branch Office a copy of the contract of employment of his Tobacco Grader who must possess sufficient expertise as such, or who has successfully completed a training course in tobacco grading/classification conducted by the NTA and/or Principal Buyer or any formal training on tobacco grading abroad or elsewhere;

d. submit to the NTA the name/s and facsimile signature/s of the designated Manager thereat of his representative, grader/s, weigher/s, and other persons who are authorized to sign for and in behalf of the License;

e. set up in front of the Trading Center/Buying Station a signboard measuring 3 feet x 6 feet containing, among others, the name and address, the words "Tobacco Buying Station, Affiliated with _____; or _____Trading Center, _________ Company Branch"; and the phrase "NTA License No. _________, 19____";

f. set up in front of the Buying Station/Trading Center a bulletin board indicating his business hours and days of trading (e.g., "Open for Business: 8:00 am to 5:00 pm, Mondays to Fridays; 8:00 am to 12:00 noon, Saturdays and Sundays")

g. display conspicuously inside the Trading Center/Buying Station samples of tobacco leaves that meet the minimum specifications or descriptions of each official grade/s. These samples shall be approved and certified by the NTA Tobacco Grader assigned thereat and shall be kept in an appropriate glass-encased display board that is visible to the public and should be changed every fifteen (15) days, or earlier in case of sudden deterioration or change in the color and quality of the tobacco samples;

h. install at least one licensed/certified and sealed weighing scale which is duly calibrated and certified by the NTA and Municipal Treasurer. The weighing scale shall be inspected and calibrated every now and then by NTA/MDRD/Branch Office personnel who shall monitor the effectiveness of such weighing scale. Daily calibration of the weighing scales of the Trading Center is required;

i. advise the Marketing Department or Branch Office of the name and address of the redrying plant/wholesale tobacco dealer/Principal Buyer where the tobacco shall be delivered for redrying and/or sorted/sold. Purchase Books installed therein shall indicate data/information on the place of tobacco delivery/Principal Buyer/Redrier.

j exhibit the original copy of the NTA License to Buy Tobacco in a conspicuous place within the premises of the Buying Station/Trading Center.

Rule 8. Order of Acceptance - Tobacco produce of farmers for sale to a Buying Station/Trading Center shall be attended strictly on a "first come, first serve" basis. TCGP farmer-cooperators whose tobaccos were hauled by the Buyers haulers shall be attended to according to the time of arrival at the Buying Station/Trading Center which shall be properly recorded in the Incoming Logbook by NTA.

Rule 9. Incoming Logbook - The NTA shall maintain an Incoming Logbook to record chronologically the order of arrival of tobaccos for sale. Each page of the logbook shall be prenumbered consecutively and it shall contain appropriate columns for the name and address of farmer/producer, ID Number, the quantity in number of bales/rolls and the time of arrival. Entries in the logbook shall be closed at the end of each trading day by the Buyer/Trading Center and the NTA representative assigned thereat.

Rule 10. Tobacco Tags - The Trading Center/Buying Station shall use tobacco tags at all times during buying. The grade of each tobacco bale or roll shall be written legibly on each of the three segments of the bale tag by the Buyer's Grader. The grade/bale tag of tobaccos subjected to arbitration shall be signed by the Tobacco Graders of NTA and Trading Center/Buying Station/Tobacco Grader or the Arbitration Committee.

Rule 11. Weighing and Tag Distribution - After the grading of the tobacco, the same shall be weighed and the segments of the tag shall be distributed as follows:

Segment No. 3. - To be attached to bale or roll of tobacco

Segment No. 2 - To Buyer

Segment No. 1 - To Farmer/Seller

Weighing of tobaccos shall be done in the presence of the NTA Representative and the farmer.

Rule 12. Purchase Invoice Voucher (PIV) - Every purchase of tobacco from a Registered Farmer/Producer must be covered by Invoice or Receipt (PIV) duly registered with the NTA and BIR, which shall be accomplished by the Buyer/Trading Center/Buying Station immediately after the grading and weighing of the tobacco but not beyond 24 hours after its delivery/hauling to the Buying Station/Trading Center and prepared in four (4) copies to be distributed as follows:

Original	-	To Buyer
Duplicate	-	To NTA Central Office
Triplicate	-	To Farmer-Seller
Quadruplicate	-	File

The PIV must indicate the name of the Tobacco Farmer seller and his ID number and/or source/origin of the tobacco.

Rule 13. Receipt of Tobacco Reject - Every Buyer who buys tobacco reject or non-descript tobacco shall indicate in the corresponding invoice the kind of Tobacco Reject purchased by him (e.g. stick, gray, oxidized, brown, burn-scorched, white, sun-dried) and its corresponding value. Tobaccos that are salty, moldy, dead, black, fixed green shall not be bought.

Rule 14. Purchase/Sales/Transfer Books - At the end of each business day, the NTA representative deployed at the Buying Station/Trading Center shall record in the Purchase/Sales/Transfer Book all tobaccos purchased/sold/transferred, in chronological order and all information pertaining to all transactions including but not limited to the following:

-	Name/Address of Farmer/Producer or source of the tobacco (Municipality/Province)
-	ID Number
-	Date of Purchase/Sale
-	Quantity/Grade and Value
-	Serial Number of Source Document or Purchase Invoice Voucher (PIV)

Regulation IV
License to Buy Tobacco

Rule 1. Objective - To assure an effective regulation and enforcement of these Rules, issuance of NTA Licenses to all tobacco buyers, redriers, processors, and other tobacco traders is required.

Rule 2. Who May Apply for License to Buy Tobacco - as a Tobacco Buyer - Any person of legal age and having the legal capacity to enter into contract, a cooperation, company, cooperative, consortium or association of tobacco dealers or any other juridical entity, duly licensed to do business in the Philippines, may apply for a License to Buy Tobacco from Registered Farmers thru its Trading Centers or Buying Stations or on its own as a Tobacco Buyer, and other Authorized Sellers subject to the provisions of Rule 7 of Regulation III.

Rule 3. Location and Use of Trading Center or Buying Station - The Buying Station/Trading Center shall be located on or adjacent to a street or thoroughfare, permitting easy access to it by farmers and shall be used exclusively for buying, baling, or packing, and storing tobacco.

The Provisions pertaining to the following Regulations as provided under the old Trading Rules and Regulations and other laws not inconsistent herewith shall remain as is and enforceable, to wit:

Rule VI	-	Mediation, Arbitration and Review
Rule VII	-	Payment of Tobacco
Rule VIII	-	Regulation Fees
Rule IX	-	Miscellaneous Regulations on Trading at the Trading Center/Buying Station
Rule X	-	Trading of Leaf Tobacco with Wholesale Tobacco Dealers
Rule XI	-	Offenses and Penalties

This Revised Trading Rules and Regulations was approved by the NTA Board of Directors under Board Resolution No. 078-93 dated November 11, 1993.

Adopted: 11 Nov. 1993

(SGD.) JOAQUIN T. ORTEGA
Administrator