GUIDELINES AND PROCEDURES FOR THE AVAILMENT BY COMMERCIAL FISHERS OF THE TAX AND DUTY EXEMPT IMPORTATION OF FISHING VESSELS, EQUIPMENT AND PARAPHERNALIA AND TAX AND DUTY REBATES…

WHEREAS, Section 35 of Republic Act 8550, otherwise known as “The
Philippine Fisheries Code of 1998” provides for incentives for
commercial fishers to fish farther into the Exclusive Economic Zone
(EEZ);

WHEREAS, paragraphs b) and c) thereof provide:

“b) commercial fishing vessel operators of Philippine registry
shall enjoy a limited period of tax and duty exemptions on the
importation of fishing vessels not more than five (5) years old,
equipment and paraphernalia, xxx

c) commercial fishing operator of Philippine registry engaged
in fisheries in the high seas shall be entitled to duty and tax rebates
on fuel consumption for commercial fisheries operations. xxx

WHEREAS, in order to encourage fishing vessel operators to fish
farther in the EEZ and beyond, these new incentives shall be granted in
addition to incentives already available from the Board of Investments
(BOI) under the Omnibus Investment Code of 1987. Such incentives shall
be granted subject to exhaustive evaluation of resource and exploitation
conditions in the specified areas of fishing operations;

WHEREAS, Sections 104 and 401 of the Tariff and Customs Code of 1978
(Presidential Decree No. 1464), as amended, empower the President of
the Republic of the Philippines, upon the recommendation of the National
Economic and Development Authority, to increase, reduce, or remove
existing protective rates of import duty, as well as to modify the form
of duty.

NOW, THEREFORE, I, JOSEPH EJERCITO ESTRADA, President of the
Republic of the Philippines, by virtue of the powers vested in me by
law, do hereby order:

SECTION 1. The rules and regulations for (a) tax and duty
exemption on the importation of fishing vessels/boats, equipment, and
paraphernalia and (b) tax and duty rebates on fuel consumption shall be
in accordance with and as outlined in ANNEX “A” hereof.

SECTION 2. The importation of articles specifically listed in ANNEX “B^[*]
” hereof, classified under Section 104 of the Tariff and Customs Code
of 1978, as amended, shall be accorded zero percent (0%) tax and duty
for a period of five (5) years from the effectivity of this Executive
Order. Provided that the importation of said articles shall be
accompanied by an Authority to Import (ATI) issued by the Maritime
Industry Authority (MARINA) and/or Certificate of Eligibility (CE)
issued by the Bureau of Fisheries and Aquatic Resources (BFAR).

SECTION 3. The importation of articles specifically listed in ANNEX
“C” hereof, classified under Section 104 of the Tariff and Customs Code
of 1978, as amended, shall be accorded zero percent (0%) tax and duty
for a period of five (5) years from the effectivity of this Executive
Order. Provided that such articles are not locally available of
comparable quality, quantity and price as determined by the Board of
Investments through the issuance of a Certificate of Non-Availability
(CNA).

SECTION 4. The Department of Agriculture, Department of Finance and
Board of Investments, in consultation with concerned private sector and
other government institutions shall conduct an annual review of the
attached ANNEXES “A, B & C” and shall report the findings of said
review and recommend possible amendments to the President.

SECTION 5. All presidential issuances, administrative rules and
regulations, or parts thereof, which are inconsistent with this
Executive Order are hereby revoked or modified accordingly.

SECTION 6. This Executive Order shall takes effect thirty (30) days
following its complete publication in two (2) newspapers of general
circulation in the Philippines.

Adopted: 09 Feb. 2000 

By the President:

(SGD.) RONALDO B. ZAMORA
           Executive Secretary

ANNEX “A”

IMPLEMENTING RULES AND REGULATIONS FOR THE
AVAILMENT OF THE TAX AND DUTY EXEMPT IMPORTATION OF FISHING VESSELS,
EQUIPMENT AND PARAPHERNALIA AND TAX AND DUTY REBATES ON FUEL CONSUMPTION

Rule I
Definition of Terms

For purposes of this Executive Order (EO), the following terms are defined as:

1. Authority to Import — refers to a certificate
issued by the Maritime Industry Authority (MARINA), upon endorsement of
BFAR, to a qualified commercial fishing vessel operator for tax and
duty-exempt importation of fishing vessels/boats covered in ANNEXES “B
& C”.

2. Certificate of Eligibility — refers to a
certificate issued by the Bureau of Fisheries and Aquatic Resources
(BFAR) to a qualified commercial fishing vessel operator for tax and
duty-exempt importation of fishing equipment and paraphernalia covered
in ANNEX “B”.

3. Certificate of Non-Availability (CNA) — refers
to a certificate issued by the Board of Investments (BOI) to a
qualified commercial fishing vessel operator verifying that a particular
article or articles covered under ANNEX “C” is/are not locally
available of comparable quality, quantity and price. This certificate
shall also serve as an authority to import said article/s tax and
duty-exempt.

4. Commercial Fishing Boat License (CFBL) —
refers to a license/permit issued by BFAR for fishing vessel/boat with
minimum capacities more than three (3) gross tons (GT) to be used for
fishing operation in Philippine territorial waters/seas, exclusive
economic zone, and in the high seas.

5. Commercial Fishing — refers to the taking of
fishery species by passive or active gear for trade, business or profit
beyond subsistence or sports fishing, to be further classified as:

a) Small-scale commercial fishing — fishing with passive or
active gears utilizing fishing vessels of above three (3) gross tons
(GT) up to twenty (20) GT.

b) Medium-scale commercial fishing — fishing utilizing active
gears and vessels above twenty (20) GT up to one hundred fifty (150) GT;
and

c) Large-scale commercial fishing — fishing utilizing active gears and vessels of more than one hundred fifty (150) GT.

6. Commercial Fishing Vessel Operator — refers to
any person, enterprise, cooperative, corporation of Philippine
citizenship presently engaged in commercial fishing as defined in Number
5 above, duly registered with the Securities and Exchange Commission
(SEC) or other appropriate government institutions, as the case may be.

7. Exclusive Economic Zone (EEZ) — refers to an
area beyond and adjacent to the territorial sea, which shall not extend
beyond 200 nautical miles from the baselines from which the breadth of
the territorial sea is measured.

8. Fishing Vessel — refers to any boat, ship or
other watercraft equipped to be used for taking of fishery species or
aiding or assisting one (1) or more vessels in the performance of any
activity relating to fishing, including, but not limited to
preservation, supply, storage, refrigeration, transportation and/or
processing.

9. Fishing equipment and paraphernalia — refers
to instruments, devices, tools, gadgets carried or installed in a
fishing vessel, used in the process of finding, attracting, catching,
conveying, storing, preserving fishery species including but not limited
to navigational and communication equipment; fishing gears such as
hydraulic winches, hoist, fishing net, puretic power blocks; fishing
lights; refrigeration system; power generators.

10. Fuel — refers to diesel oil or bunker fuel in
its finished form ready for use to propel international fishing vessel,
excluding lubricants and greases and other petroleum products.

11. General Arrangement Plan of the Vessel — refers
to the layout/plans of information as to ships deck outlines derived
from the hull form, as developed, and main waterlight transverse
bulkheads, properly positioned with reference with floodable length.

12. High Seas — refer or apply to all parts of the
sea that are not included in the exclusive economic zone, in the
territorial sea or in the internal waters of a State, or in the
archipelagic waters of an archipelagic State.

13. Integral parts of fishing vessel — refers to
items which are built into or protrude through, the ship’s hull, such as
sea chests, bow thrusters, stern thrusters, stabilizers, waterjet
intakes, waterjet nozzles, tailshafts, rudder pintels and gudgeons.
Integral parts are considered to have a direct affect on the
water-tightness and structural integrity of the vessel.

14. Latest survey report from the country of origin
— refers to the latest report from the country of origin after the
examination or inspection of a ship or parts of its cargo or equipment
to determine its condition, responsibility for damage and disposition to
be made.

15. Lease-Purchase Agreement — refers to an
agreement for the lease of a foreign owned vessel to a Filipino citizen,
qualified corporation or association for commercial fishing by a
foreign person, corporation or entity with the option granted to the
lessee to purchase the vessel.

16. Not locally produced/available — refers to not locally produced articles relative to quantity, quality, and price.

17. Tax and duty-exempt importation — refers to the
bringing in of goods from the country of origin through a normal
business transaction process, wherein the payment of the corresponding
duties on the goods involved as well as the value added tax (VAT) for
the said transaction, are waived. In this case, the goods referred to
are the fishing vessels, equipment and paraphernalia.

18. Tax and duty rebate — shall mean a credit
against taxes and duties equal to those actually paid in the purchase of
fuel oil used in the commercial fishing operation, which shall be
evidenced through the issuance of a Tax Credit Certificate by the
Department of Finance (DOF) One Stop Shop Tax Credit and Duty Drawback
Center.

19. Valid Certificate of Vessel’s Registry from the Country of Origin — a valid document issued by the government establishing the nationality and ownership of a vessel.

Rule II
Tax and Duty-Exempt Importation of Fishing Vessels, Equipment and Paraphernalia

SECTION 1. Covered Articles

A. The tax and duty-exempt importation under this EO shall cover the following:

1) Articles listed in ANNEX “B” of this EO, subject to the
completion of the requirements as provided for under Section 4 hereof.

2) Articles listed in ANNEX “C” of this EO, subject to
BOI’s certification stating that an article to be imported is not
locally available of comparable quality, quantity and price.

3) Fishing vessels/boats covered under ANNEXES “B & C” of this EO shall be not more than five (5) years old.

B. The importation of articles shall be subject to all
existing import rules, regulations, and requirements, as the case may
be.

SECTION 2. Covered Enterprises

All commercial fishing vessel operators of Philippine registry as
defined in Number 6 of Rule I hereof are eligible to avail of the tax
and duty incentives provided for herein.

SECTION 3. Period of Exemption

A. The tax and duty exemption may be availed of within five (5) years from the date of the effectivity of this EO.

B. Imported articles already in transit when the incentive is
still effective but will arrive at any Philippine port when the period
of incentive has already expired, shall be granted with tax and duty
exemption. Provided that the corresponding letter of credit has been
opened prior to or during the day of expiration of the effectivity of
the EO.

SECTION 4. Procedures for the Availment of Tax and Duty Exemption

A. Fishing vessels/boats and its integral parts

1) A qualified commercial fishing vessel operator shall file
the following documents to the BFAR in order to avail of the tax and
duty-exempt importation of fishing vessels/boats listed in ANNEXES “B
& C”:

a) Application letter/request;

b) Commercial Fishing Boat License (CFBL) or in the case of a newly formed fishing company:

1. Latest business registration issued by SEC, CDA, DTI, and Municipal LGUs, as the case may be; and

2. In the case of newly formed corporation or cooperatives, By-Laws or Articles of Incorporation.

c) In the case of a cooperative or corporation:

1. Duly notarized resolution of the company’s Board of
Directors, certified by the Board Secretary, authorizing the filing of
the application and designating the authorized representative to
represent the company;

2. Latest certificate of good standing showing the current
list of directors/officers of Company Seal of Business Registration of
the registered owner; and

3. Duly notarized/authenticated Power of Attorney of Board
Resolution authorizing the signatory to the Memorandum of Agreement to
act as such in behalf of the registered owner.

d) Valid Certificate of Vessel’s Registry from the country of origin;

e) General arrangement plan of the vessel;

f) Latest survey report from the country of origin;

g) Sworn statement that the vessel to be imported is for the exclusive use of the importing enterprises;

h) Any of the following; and:

1. Valid Memorandum of Agreement/Lease-Purchase Agreement; or

2. Pro-forma Invoice or Purchase Order; or

3. Deed of Sale.

i) In the case of fishing vessel/boat covered under ANNEX “C”, Certificate of Non-Availability issued by BOI.

2) BFAR shall review and process applications for tax and
duty-free importation provided that the required documents under Section
4 A of this Rule are complete and in order. Based on the documents
submitted, BFAR shall determine whether the applicant is a qualified
fishing vessel operator and subsequently issue an endorsement together
with the documents referred in Section 4 A of this Rule to MARINA within
three (3) working days from the date of receipt, stating therein its
favorable endorsement for the tax and duty-exempt importation of the
fishing vessel/boat.

3) Only upon receipt of BFAR’s endorsement with the
supporting documents mentioned above, MARINA shall evaluate the sea
worthiness of the vessel and issue an Authority to Import (ATI) to the
applicant and shall forward a copy (with a copy of BFAR’s endorsement)
to Department of Finance (DOF) Revenue Office within three (3) working
days. The Administrator or his duly authorized representative shall be
the signatory to the Authority to Import.

B. Fishing equipment and paraphernalia covered under ANNEX “B” excluding fishing vessels/boats.

1) A qualified commercial fishing vessel operator shall file
the following documents to BFAR in order to avail of the tax and
duty-exempt importation of fishing equipment and paraphernalia listed in
ANNEX “B”:

a) Application letter/request;

b) Commercial Fishing Boat License (CFBL);

c) Pro-forma Invoice from prospective foreign supplier or Purchase Order of an enterprise to a foreign supplier; and

d) A sworn statement that the articles to be imported are for the exclusive use of the importing enterprise/applicant.

2) BFAR shall review and process the application, provided
that the required documents under Section 4 A of this Rule are complete
and in order and shall issue a Certificate of Eligibility (CE) and
forward a copy to DOF within three (3) working days from the date of
receipt of the application/request. The BFAR Director or his/her duly
authorized representative shall be the signatory to the CE.

C. Fishing vessels/boats, equipment and paraphernalia covered under ANNEX “C”.

1) A qualified commercial fishing vessel operator must first
secure a Certificate of Non-Availability (CNA) from the Board of
Investments (BOI) in order to avail of the tax and duty-exempt
importation of fishing equipment and paraphernalia listed in ANNEX “C”.
For this purpose, a fishing vessel operator must submit to BOI the
following documents:

a. Application letter/request;

b. CFBL;

c. Pro-forma Invoice from prospective foreign supplier or Purchase Order of an enterprise to a foreign supplier; and

d. A sworn statement that the articles to be imported are for the exclusive use of the importing enterprise.

2) Based on the documents submitted, BOI finds that the
article to be imported is not locally produced of comparable quantity,
quality and price, the BOI shall issue a Certificate of Non-Availability
(CNA) for tax and duty-exempt importation and forward a copy to DOF
Revenue Office within ten (10) working days from the date of receipt of
the application with supporting documents. The BOI Executive Director or
his duly authorized representative shall sign the CNA.

3) In the case of fishing vessels/boats covered under ANNEX
“C”, however, the importing commercial fishing vessel operator issued
with CNA is still subject to the requirements and procedures provided
under Section 4 of this Rule.

SECTION 5. Arrival and release of shipment

A. Upon arrival of the articles covered under ANNEXES “B or
C” at any of the Philippine ports, the importer shall submit the
corresponding ATI, CE, or CNA including its corresponding documents
referred in Section 4 of this Rule, as the case may be, to DOF Revenue
Office for processing and evaluation.

B. The DOF Revenue Office shall subsequently issue an
endorsement to the BOC Tax Exempt Division for the release of the tax
and duty-exempt articles within three (3) working days from the date of
receipt of request/application submitted by the importing fishing vessel
operator.

C. Upon receipt of the DOF’s endorsement, the BOC Tax Exempt
Division shall forward the same to the Collector of Customs at the
concerned port.

D. The Customs Collector shall then instruct the release of
the imported fishing vessel, equipment and/or paraphernalia.

E. The BOC shall then release the imported vessel upon
completion of the requirements and documents within 5 working days.

Rule III
Tax and Duty Rebate on Fuel Consumption

SECTION 1. Covered Enterprises

All commercial fishing vessel operators of Philippine registry
engaged in fishing in the high seas as defined in Number 12 of Rule I
are eligible to avail of duty and tax rebates on fuel consumption being
granted under Section 35 of Republic Act No. 8550 otherwise known as The
Philippine Fisheries Code of 1998.

SECTION 2. Covered Fuel Consumption

Taxes and duties paid on fuel as defined in No. 10 of Rule I and
consumed by covered enterprises for their commercial fishing operations
shall be eligible for tax and duty rebates, provided the fuel involved
is consumed within one (1) year from the date of purchase.

SECTION 3. Documentation Requirements

A commercial fishing vessel operator operating in the high seas
availing of the fuel oil tax and duty rebates must submit the following
documents to the Department of Finance (DOF) ONE-STOP-SHOP TAX CREDIT
AND DUTY DRAWBACK CENTER:

A. Inspection of Vessels for high seas water issued by MARINA (certified true copy by MARINA);

B. Commercial Fishing Boat License issued by BFAR;

C. Notarized Certificate of Fuel Loaded issued by BOC Customs Inspector;

D. Documents as proof of fuel consumed;

1.) Certification under oath of commercial fishing vessel
operator the average fuel oil consumption of the subject vessel for a
given period of time indicating therein the following information:

a. Name of fishing vessel and its registry number;

b. Quantity of fuel oil bought;

c. Invoice Number; and

d. Date and place of delivery;

2) Certification under oath of the Chief Engineer as attested by the
Skipper/Captain as to the total fuel oil consumed for the duration of
the fishing expedition;

3) A sworn statement attesting that the distance/areas reflected in
the attached copy of the portion of the logbook of the vessel indicating
therein the areas in longitudes and latitudes scales based on
international standard maritime chart/map are the actual areas/distance
traveled by the subject fishing vessel.

E. Documents as proof of fuel purchased; and

1) Original copy of sales invoices, official receipts

2) Bunkering fuel permit issued by the Office of the Customs
Collector or the Port Operations Division of the Bureau of Customs, as
the case may be.

3) Certification under oath from the fuel company attesting to the payment of customs duties and excise taxes.

F. Documents as proof of fuel oil delivered.

1) Certification under oath by the Captain of the ship relative to the quantity and amount of fuel delivered on board.

2) Certification under oath by the owner/operator of the vessel
relative to the quantity and amount of fuel delivered on board.

3) Certification under oath by the Oil companies/Fuel suppliers as to the actual delivery of fuel on board.

SECTION 4. Procedures for the availment of tax and duty rebate on fuel consumption

A. The applicants for tax and duty rebate shall file the
documents referred in Section 3 of this Rule together with an
accomplished Claimant Information Sheet (CIS) to the DOF-ONE-STOP SHOP
TAX CREDIT AND DUTY DRAWBACK CENTER and shall pay a non-refundable
filing fee to the DOF-CENTER. The filing fee can be paid in cash or in
manager, cashier or company check.

B. The application will be checklisted within five (5)
working days as to completeness of the documents. Once the documents
submitted are complete, a claim stub shall be issued to the claimant.
The Claimant shall again pay a non-refundable processing fee to the
DOF-CENTER. Also the processing fee can be paid in cash or in manager,
cashier or company check.

C. Subsequently, a tax credit certificate corresponding to
the amount of the approved rebates shall be issued within thirty (30)
working days after the issuance of the claim stub, subject to the
DOF-CENTER’s policies, rules and regulations, and other applicable laws
governing the issuance of tax credits.

SECTION 5. Transferability of Tax Credit Certificate

The fuel tax credit certificates issued under this EO shall be
transferable only to fuel oil companies where the commercial fishing
vessel operator sourced the fuel consumed in their commercial fishing
operations in the high seas.

Rule IV
Penal Provision

SECTION 1. Any person who will make any fraudulent
claim under the Act, regardless of whether or not a tax incentive has
been granted, shall, in addition to other penalties provided by law,
shall be punished in accordance with the governing provisions under
Title X, Statutory Offenses and Penalties of the National Internal
Revenue Code of 1997.

SECTION 2. Furthermore, all tax and duty-exempt
importation pursuant to these rules and regulations when sold,
transferred or disposed of to non-exempt persons/entities, shall be
liable to pay twice the amount of taxes and duties waived or subject
such articles to compensation and/or seizure in accordance with the
provisions of the Tariff and Customs Code, as amended. Civil penalties
such as payment of surcharge and interest shall be imposed pursuant to
Sections 248 and 249 of the National Internal Revenue Code, as amended.

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^[*] Text Available at Office of the National Administrative Register, U.P. Law Complex, Diliman Quezon City.