MODIFYING THE RATES OF DUTY ON CERTAIN IMPORTED ARTICLES AS PROVIDED UNDER THE TARIFF AND CUSTOMS CODE OF 1978, AS AMENDED, IN ORDER TO IMPLEMENT THE MINIMUM 50% MARGIN OF PREFE…

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WHEREAS, the Philippines is a Contracting Party to the Basic Agreement on
ASEAN Industrial Complementation (BAAIC) signed in Manila on 16 June 1981;

WHEREAS, the Philippines is a signatory to the Memorandum of Understanding
(MOU) on the Brand-to-Brand Complementation (BBC) Scheme for the Automotive
Industry under the BAAIC signed by the ASEAN Economic Ministers in Pattaya,
Thailand on 18 October 1988;

WHEREAS, the Philippines is a participating country in the approved BBC
Schemes of Honda Motor Co., Ltd. and Toyota Motor Corporation along with
Indonesia, Malaysia and Thailand;

WHEREAS, at the ASEAN Senior Economic Officials Meeting held on 7-8
November 1995, it was agreed that under the Honda BBC Scheme, the Philippines
will import from Indonesia, Malaysia and Thailand certain
completely-knocked-down (CKD) component parts for the original equipment
manufacture (OEM) of passenger cars of the Accord 4 Door SV8, Civic 4 Door SY6
and EK 4 Door Sedan SX8 Models, in exchange for Philippine exports of
complementary component parts to the three participating countries;

WHEREAS, under the Toyota BBC Scheme approved on an ad referendum basis by
Indonesia on 12 December 1995, by Malaysia on 28 November 1995 and by the
Philippines on 12 January 1996, the Philippines will import engine assembly
from Indonesia for the original equipment manufacture of TUV commercial
vehicles for the transport of passengers and goods in exchange for Philippine
exports of transmission components to Indonesia;

WHEREAS, at the Meeting of the ASEAN Senior Economic Officials (SEOM) held
in Jakarta, Indonesia on 3-5 June 1996, it was agreed that under the Toyota
Motor Corporation BBC Scheme, the Philippines will import inlet air cleaner
from Thailand for the original equipment manufacture of Corolla passenger cars
in exchange for Philippine exports of transmission assembly to Thailand;

WHEREAS, under the MOU on the BBC Scheme in the Automotive Industry, the
Philippines shall grant a minimum 50% Margin of Preference (MOP) to BBC
products approved by the SEOM subject to the terms and conditions set out in
Section 9(b) of said MOU;

WHEREAS, under Section 9(b)(i) of the said MOU, the 50% MOP for existing
BBC products shall be granted within 90 days of approval of the BBC products by
the SEOM, and for new BBC products, the grant shall be extended from the actual
date of commercial production of the products, or upon expiry of 30 months from
the date of approval of the products whichever comes earlier;

WHEREAS, the various component parts specified in Certificates of
Eligibility (COEs) Nos. HM/2/B/96, HM/5/B/96, HM/8/B/96, HM/11/B/96, HM/17/B/96
and HM/24/B/96, re-issued on 1 September 1996 in favor of Honda Motor Co.,
Ltd., are existing products, i.e., already being manufactured at the time of
original approval by the SEOM held on 7-8 November 1995;

WHEREAS, the engine assembly, specified in Certificate of Eligibility (COE)
No. TMC/6/A/95 issued on 23 January 1996 in favor of Toyota Motor Corporation,
is a new BBC product whose commercial production started in February 1996;

WHEREAS, inlet air cleaner, specified in Certificate of Eligibility (COE)
No. 014-1 issued on 24 June 1996 in favor of Toyota Motor Corporation, is a new
BBC product whose commercial production started in July 1996;

WHEREAS, under paragraph b(ii) of Section 9 of the MOU, non-participating
countries shall initially waive their rights under Chapter II, Article 8,
paragraph 2, of the ASEAN Preferential Trading Arrangements (PTA) for the first
four years from date of granting of MOP and shall thereafter enjoy the MOP
granted by participating countries as soon as they extend the same MOP;

WHEREAS, under paragraphs b(ii) and b(iv) of Section 9 of the MOU, the
waiver period shall be extended beyond the first four years for as long as the
non-participating countries do not wish to grant the MOP up to a maximum waiver
period of eight years. After the maximum eight-year waiver period, any entity
in any member country, whether the member country is participating in the
specific BBC Scheme or not, which produces the BBC product shall enjoy the same
MOP in the participating countries for the BBC product.

NOW, THEREFORE, I, FIDEL V.
RAMOS, President of the Philippines, pursuant to
the powers vested in me under Section 402 of the Tariff and Customs Code of
1978, as amended, do hereby order:

SECTION 1. The articles specifically listed in Annex “A” hereof, as
classified under Section 104 of the Tariff and Customs Code of 1978, as
amended, shall be accorded a minimum 50% MOP as specified in Column 11 thereof.
In effect, said articles shall be subject to the BBC Preferential Tariff in
accordance with the schedule indicated opposite each article as specified in
Columns 12, 13, 14, 15 and 16 of Annex “A”.

SEC. 2. The articles specifically listed in Annex “B” hereof, as
classified under Section 104 of the Tariff and Customs Code of 1978, as
amended, shall be accorded a minimum 50% MOP as specified in Column 12 thereof.
In effect, said articles shall be subject to the BBC Preferential Tariff in
accordance with the schedule indicated opposite each article as specified in
Columns 13, 14, 15, 16, 17 and 18 of Annex “B”.

SEC. 3. The MOP provided in Annex “A” on block assy cylinder and bumper
parts for Accord 4 Door SV8 and Civic 4 Door SY6 passenger cars and on bumper
parts and various component parts for EK 4 Door SX8 passenger cars, as
specified in Annex “A”, shall be accorded exclusively to the BBC entity
in Indonesia (P.T. Honda Prospect Engine Manufacturing), Malaysia (Honda
Autoparts Manufacturing (M) Sdn. Bhd.) and Thailand (Honda Cars Manufacturing
Thailand Co., Ltd.) effective from January 1, 1996 up to December 31, 1999.
Thereafter, the same MOP may be granted to a non-participating ASEAN country as
soon as that country extends the same MOP itself. If the non-participating
country does not wish to grant such MOP and maintains such position throughout
the stipulated maximum waiver period of eight (8) years, the exclusive
application of the MOP to Indonesia. Malaysia and Thailand shall then be
extended up to December 31, 2003.

SEC. 4. The MOP provided in Annex “B” on engine assembly for TUV
(Models KF42, KF52, CF50) motor vehicles for the transport of passengers and
goods under the Toyota Motor Corporation BBC Scheme shall be accorded
exclusively to the BBC entity in Indonesia (P.T. Toyota-Astra Motor) effective
from February 1, 1996 up to January 31, 2000. Thereafter, the same MOP may be
granted to a non-participating ASEAN country as soon as that country extends
the same MOP itself. If the non-participating country does wish to grant such
MOP and maintains such position throughout the stipulated maximum waiver period
of eight (8) years, the exclusive application of the MOP to Indonesia shall
then be extended up to January 31, 2004.

SEC. 5. The MOP provided in Annex “B” on inlet air cleaner No. 1 for
Corolla (Models EE 100, EE 101, AE 101) passenger cars under the Toyota Motor
Corporation BBC Scheme shall be accorded exclusively to the BBC entity in
Thailand (Toyota Motor Thailand Co., Ltd.) effective from July 1, 1996 up to
June 30, 2000. Thereafter, the same MOP may be granted to a non-participating
ASEAN country as soon as that country extends the same MOP itself. If the
non-participating country does not wish to grant such MOP and maintains such
position throughout the stipulated maximum waiver period of eight (8) years,
the exclusive application of the MOP to Thailand shall then be extended up to
June 30, 2004.

SEC. 6. The 50% MOP accorded under this Executive Order shall remain
effective regardless of any subsequent changes in the basic Philippine rate of
duty on the aforementioned articles.

SEC. 7. Upon the effectivity of this Executive Order, the articles
specifically listed in the aforesaid Annexes “A” and “B” which are
entered or withdrawn from warehouses in the Philippines for consumption shall
pay the applicable BBC Preferential Tariff specified under Sections 1 and 2
hereof, subject to qualification under the Rules of Origin as prescribed in the
Agreement on ASEAN Preferential Trading Arrangements, as amended.

SEC. 8. Any revision/s to the part numbers appearing in Column 4 of Annexes
“A” and “B” shall be communicated immediately to the Bureau of Customs by
the Department of Trade and Industry within five (5) days after receipt of the
official copy of the revised part numbers from the ASEAN Secretariat.

SEC. 9. This Executive Order shall take effect immediately.

DONE in the City of Manila, this 31st day of January in the year of
Our Lord, Nineteen Hundred and Ninety-Seven.

 (Sgd.) FIDEL
V. RAMOS
President of the Philippines

By the President:

(Sgd.) RUBEN D. TORRES
Executive Secretary

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