103 OG No. 8, 890 (Feb. 19, 2007)
WHEREAS, under Section 602 of the Tariff and
Customs Code of the Philippines, as amended, the Bureau of Customs
(BOC) is mandated to, among others, assess and collect lawful revenues
from imported articles, prevent and suppress smuggling and other frauds
against Customs, and exercise supervision and control over all import
and export cargoes, landed or stored in piers, airports, terminal
facilities, including container yards and freight stations, for the
protection of government revenue;
WHEREAS, in the pursuit
of trade facilitation and law enforcement, the BOC issued Customs
Administrative Order (CAO) No. 1-2002 providing for the use of container
x-ray machine as an alternative to actual physical examination to
further speed up the examination of shipments and movement of cargoes;
WHEREAS,
in line with such mandate, the BOC proposed to the National Economic
and Development Authority (NEDA) Board, and the latter approved, the
Non-Intrusive Container Inspection System (NCIS) Project, which is the
most reliable means of container content identification while at the
same time improving accuracy and correctness of assessment and
collection of duties and taxes; abating smuggling and the illegal entry
of drugs and hazardous materials; and improving the inflow and outflow
of containers through the ports;
WHEREAS, the NCIS
Project, as embodied in the Framework of Bilateral Agreement between the
Republic of the Philippines and the People’s Republic of China,
provides for the acquisition by the BOC of its NCIS through the grant of
a concessional loan by China and pursuant to a government-to-government
(G-to-G) procurement arrangement;
WHEREAS, pursuant to
the government-to-government (G-to-G) procurement arrangement, the BOC
and Nuctech Co Ltd. of China, the company nominated by the Chinese
government as being the only qualified supplier of the required
container scanning machines, signed a purchase agreement for the
procurement of the NCIS;
WHEREAS, the loan agreement
between the BOC thru the Department of Finance and the Export-Import
Bank of China, the bank nominated by the Chinese Government for the loan
processing, was signed, thus, the purchase agreement entered into by
and between the BOC and Nuctech Co. Ltd. has come into force and effect;
WHEREAS,
to ensure the sustainability of the NCIS Project, the importers and/or
exporters, being the direct beneficiaries, shall be charged a container
security fee (CSF), for every importation/exportation that passes
through any customhouse; and
WHEREAS, the CSF to be collected shall cover loan repayment, maintenance, operational costs and other related expenses.
NOW, THEREFORE, I, GLORIA MACAPAGAL-ARROYO, President of the Republic of the Philippines, by virtue of the powers vested in me by law, do hereby order:
Section 1. Scope.
This Executive Order shall apply to all import and export cargoes,
landed or stored in piers, airports, terminal facilities, including
container yards and freight stations under the jurisdiction of the BOC.
Section 2. Container Security Fee.
All shipments covered by this Executive Order shall be imposed the NEDA
Board-approved mandatory container security fee (CSF) in Philippine
currency equivalent to US$50 for every forty-footer container or US$25
for every twenty-footer container or twenty equivalent units (TEUs),
provided that the Com- missioner of Customs shall adjust the rates of
the CSF in accordance with the schedule of fees as approved by the NEDA
Board.
Section 3. Utilization of the CSF. The CSF shall be expended and utilized in the following manner:
- Seventy
five percent (75%) shall be remitted to the National Treasury as part
of the General Fund for the repayment of the concessional loan to China,
including interest, fees and other charges attendant thereto.
After
the completion of the concessional loan payment, the 75% allocation
shall be deposited in a Trust Fund, hereinafter created, in addition to
the 25% allocation.
- Twenty five percent (25%) shall be
retained by the BOC and maintained as an administrative support system
to be deposited in a Trust Fund for the sustainability of the NCIS
Project including but not limited to the following purposes:
b.1 | Maintenance and improvement of the operation of the NCIS, including the upgrading thereof; |
b.2 | Institutionalization of post audit procedures and processes; |
b.3 | Fraud and fraud-related investigations and prosecutions; |
b.4 | Training and related programs to enhance the capability and competence of personnel tasked to operate and maintain the system; |
b.5 | Other activities and programs to enhance the effectiveness and efficiency of the system as the BOC may deem to be appropriate. |
Section 4. Creation of a Trust Fund.
A NCISP Trust Fund is hereby created and established which shall be
sourced from the twenty five percent (25%) portion of the CSF collected
as stated in Section 3, paragraph b of this Executive Order. A permanent
committee created under Section 45, Chapter 5, Book VI of Executive
Order No. 292, otherwise known as the Administrative Code of 1987, shall
monitor and evaluate the activities and the balances of the Trust Fund.
Section 5.
Failure to follow the directives of this Executive Order shall subject
concerned officials to administrative sanctions pursuant to existing
laws, rules and regulations.
Section 6. This Executive Order shall take effect immediately upon its publication in a national newspaper of general circulation.
Adopted: 15 Dec. 2006
(SGD.) GLORIA MACAPAGAL-ARROYO
President of the Philippines
By the President:
(SGD.) EDUARDO R. ERMITA
Executive Secretary