OMNIBUS RULES ON THE LAY-UP OF VESSELS

Pursuant to Presidential Decree No. 474, EO 125/125A and Letter of
Instruction No. 341 (LOI 341) dated 28 November 1975 mandating the
Maritime Industry Authority (MARINA) to declare vessel lay-up centers,
oversee and coordinate with the various activities/programs of
government offices relative to the supervision and regulation of the
lay-up centers in the Philippines, the following rules are hereby
adopted:

I. OBJECTIVE

This Circular shall prescribe the general policy, rules and procedures for the following:

1. the declaration of lay-up centers;
2. accreditation of lay-up agents; and
3. issuance of lay-up permit and departure clearance

II. COVERAGE

This Circular shall apply to:

1. all persons, corporations, firms and entities engaged or intending to engage in the business of vessel lay-up;
2. all foreign vessels due for lay-up; and
3. all possible centers or sites which the MARINA may find suitable for vessel lay-up.

III. DEFINITION OF TERMS

1. Certificate of Accreditation refers to the document issued to a lay-up agent upon compliance with the requirements under this Circular.

2. Principal Officers are those occupying positions
in the company such as general manager, chief operating officer, marine
superintendent or similar positions that require the daily supervision
and management of marine and business activities.

3. Lay-up Center refers to the anchorage areas in
Malalag Bay, Pujada Bay Mayo Bay and Bunawan Bay within Davao Gulf,
designated by the Philippine government for use as lay-up sanctuaries
for unemployed foreign vessels, and other areas declared by the MARINA.

4. Vessel Lay-up refers to foreign vessel not actively employed availing the facilities and sanctuary inside the lay-up center.

5. Vessel Lay-up Agent refers to a person or entity duly accredited under this Circular.

IV. GENERAL PROVISIONS

1. Only anchorage areas in Davao Gulf, particularly Malalag Bay,
Bunawan Bay, Pujada Bay, Mayo Bay and other lay-up sites declared by
MARINA shall be used as lay-up centers of foreign vessels.

2. The Accreditation under this Circular shall serve as a
pre-requisite to the grant of lay-up permits and departure clearances to
be issued by MARINA.

3. Before a foreign vessel can be laid-up in any of the declared
lay-up center, the services of a lay-up agent must be procured.

4. All foreign vessels due for lay-up shall be represented by a
designated accredited lay-up agent for the duration of the lay-up
period.

5. All foreign vessels due for lay-up are required to comply with the
procedural guidelines for the use of lay-up centers in the Philippines
as submitted by the concerned accredited lay-up agent.

6. No foreign vessel shall be laid-up or leave from the vessel lay-up
center without prior permit from the MARINA which will be issued to the
lay-up agent.

7. During the duration of the lay-up period, MARINA may at any
reasonable time, conduct on-site survey or inspection for general
monitoring purposes in coordination with the vessel lay-up agent’s
representative.

8. The active participation of the Bureau of Immigration (BI),
Philippine Ports Authority (PPA), Bureau of Customs (BUCUS), Philippine
Coast Guard (PCG) and Bureau of Quarantine (BQ) shall be requested by
MARINA through proper coordination more specifically in the easing up or
relaxation of normal administrative requirements relative to the entry,
lay-up and departure of foreign vessels and their crew to and from the
lay-up centers taking into account the interests of national safety and
security.

9. The Authority shall coordinate with the Department of Environment
and Natural Resources relative to the identification and declaration of
lay-up areas in consideration of the marine environmental protection.

V. SPECIFIC PROVISIONS

1. DECLARATION OF LAY-UP CENTERS

The declaration of an area by the MARINA as a lay-up center commences
upon the information gathered or received and verified by the MARINA
containing the data below:

1.1 The area is out of the typhoon belt or, in the alternative,
ships can be sufficiently protected from storm or typhoon by natural
shelter or cove.

1.2 Depth of water is 95 feet or deeper

1.3 Ocean current is minimal

1.4 Rise and fall of tide is approximately 4 feet or, in the alternative with predictable movement

1.5 Anchorage and approach is free from hazardous underwater obstacles

1.6 The area is clear of shipping lanes and it has an open roadstead anchorages

1.7 The area is sheltered from all directions by surrounding hills

1.8 Water is pollution free.

Based on verification made by the MARINA it shall declare the area as
lay-up center and subsequently issue MARINA Advisory, copy furnished
the MARINA Board.

2. ACCREDITATION OF LAY-UP AGENTS

2.1 Responsibilities of the Lay-up Agent

2.1.1 The Vessel Lay-up Agent shall coordinate with the MARINA in
putting up of necessary lay-up facilities and logistics, prior to
operation.

2.1.2 The Vessel Lay-up Agent shall assume full responsibility
in behalf of the foreign vessel principal in all transactions with
government instrumentalities and consequently coordinate with all
concerned government agencies relative to the request for foreign vessel
lay-up.

2.1.3 The Vessel Lay-up Agent shall only use the designated area
by MARINA as specified in the lay-up plan. Additional lay-up areas shall
be approved by MARINA.

2.1.4 The Vessel Lay-up Agent shall at all times maintain Vessel
Lay-up safety and security measures to protect the marine environment
and ensure the safety of other vessels navigating within the designated
area.

2.1.5 The Vessel Lay-up Agent shall provide full security and
deploy security guards on board during the duration of the vessel lay-up.

2.2 Filing Of Application

2.2.1 Applications for accreditation shall be filed with the
MARINA Central Office or in the MARINA Regional Office with jurisdiction
over the declared lay-up center.

2.3 Qualification Requirements For Accreditation

2.3.1 Nature of Business Undertaking

2.3.1.1 For corporation and partnerships, the laying-up of
vessel shall be reflected in the Articles of Incorporation or Articles
of Partnership and duly registered with the Securities and Exchange
Commission (SEC).

2.3.1.2 For single-proprietorships, one of the major
activities or concerns shall be laying-up of foreign vessels and duly
registered with the Department of Trade and Industry (DTI).

2.3.2 Management Competence

2.3.2.1 The vessel lay-up agent shall have its principal
officer or officers with at least one (1) year maritime-related work
experience.

2.3.2.2 The vessel lay-up agent must have adequate employed
personnel for coordination with various government offices and local
government units relative to permits or clearances attendant to foreign
vessel lay-up, as well as required arrangement.

2.3.3 Technical Capability

2.3.3.1 The applicant must have at its disposal tugboats,
mooring buoys, communication equipment and safety equipment and
facilities capable of assisting big ships going to and leaving the
lay-up area.

2.3.3.2 The applicant must have at its disposal logistics
vessel to cater to the requirements of laid-up vessel and its crew for
the duration of the lay-up.

2.3.4 Financial Capability

2.3.4.1 For corporations or partnerships or
single-proprietorship and other entities, a minimum paid-up
capitalization of P5M shall be required.

2.4 Documentary Requirements

2.4.1 Letter of intent or application;

2.4.2 For Corporations or Partnerships – SEC Registration
Certificate including Articles of Incorporation/partnership and By-Laws.

2.4.3 For Single Proprietorship – DTI Certificate of Registration
including copy of the original application form filed with DTI.

2.4.4 For existing company, Latest Audited Financial Statement. For new company, audited financial statement is not required.

2.4.5 Company profile indicating list of Principal Officers and
their bio-data with particular emphasis on experience in
maritime-related activities.

2.4.6 List of vessel lay-up facilities and equipment in accordance with the MARINA prescribed checklist of requirements.

2.4.7 Payment of the processing fee.

2.5 Validity Of Certificate Of Accreditation

The Certificate of Accreditation shall be valid for a period of three (3) years from the date of issuance.

2.6 Reportorial Requirements

All MARINA accredited vessel lay-up agents shall submit the
certified true copies of the following reports or documents within the
period herein prescribed:

2.6.1 Amendment of Articles of Incorporation (AOI) or by-laws
within thirty (30) calendar days from the date of approval of said
amendment with the SEC.

2.6.2 Replacement of any principal officers/directors within
thirty (30) calendar days thereafter, together with their BIO-DATA.

2.6.3 A MARINA accredited lay-up agent shall submit quarterly
report on vessels laid-up, the status of the vessel lay-up or presently
being laid-up.

2.6.4 Accidents or incidents encountered during the vessel lay-up shall be reported immediately.

2.7 Withdrawal From Business Or Suspension Of Operations

Whenever a MARINA-accredited lay-up agent decides to withdraw from
business or suspends operations, a written notice of at least fifteen
(15) days prior to said suspension or withdrawal shall be submitted to
the MARINA whereupon the latter shall suspend the Accreditation of the
lay-up agent. The Lay-up Agent shall automatically surrender to MARINA
the original Certificate of Accreditation issued.

3. ISSUANCE OF VESSEL LAY-UP PERMIT AND DEPARTURE CLEARANCE

3.1 Procedure in Securing Lay-up Permit and Departure Clearance

3.1.1 Prior to vessel lay-up, the lay-up agent shall apply to
MARINA Central Office or in the MARINA Regional Office with jurisdiction over the declared lay-up center the following information of the
vessel: ship’s particulars, country of registry, owner, tentative
schedule of lay-up period and expected time of arrival, crew list.

3.1.2 Upon submission of the required information mentioned
above, the MARINA shall issue the Authority to Accept Payment to the
accredited vessel lay-up agent.

3.1.3 The accredited lay-up agent shall pay the lay-up permit fee and the lay-up fee.

The lay-up fee is payable on every fifth working day of the
month, and that the account of the same shall be cleared prior to
departure of the foreign vessel from the lay-up site.

3.1.4 The MARINA upon receipt of required fees or charges shall
issue the lay-up permit per vessel to the lay-up agent. All concerned
government authorities i.e. BUCUS, BI, BoQ and PPA shall be informed of
the approval of MARINA requesting their assistance.

3.1.5 The MARINA shall issue the departure clearance to the
vessel lay-up agent only upon showing that the departure clearance fee
and the lay-up fees are paid in full and shall coordinate with the
concerned government agencies of the exact departure of the foreign
vessel.

3.2 Documentary Requirements

	Application for
	Documents Lay-up Permit	Departure Clearance
3.2.1 Letter of Intent	x	x
3.2.2 Copy of a Certificate of Accreditation as lay-up agent	x
3.2.3 Date of arrival of foreign vessel to be laid-up	x
3.2.4 Date of departure of foreign vessel		x
3.2.5 Foreign vessel information as enumerated in item 3.1.1 under this Section	x

VI. FEES AND CHARGES

Accreditation of Lay-up Agents	– P 10,000.00 per application
Issuance of Lay-up Permit	– 2,500.00 per permit
Departure Clearance	– 2,500.00 per clearance
Lay-up Fee (Nominal):
Vessels below 50,000 DWT	– US$ 91.00 per day
Vessels of 50,000 DWT – 150,000 DWT	– US$ 104.00 per day
Vessels of above 150,000 DWT	– US$ 117.00 per day

VII. FINES AND PENALTIES

1. Vessel Lay-up Agent without MARINA Certificate of Accreditation, the following administrative fines shall be imposed:

First Violation                                P 5,000.00
Second Violation                             10,000.00
Third and Succeeding Violations       25,000.00

2. Vessel Lay-up Agent with expired Certificate of Accreditation,
administrative fines equivalent to fifty percent prescribed under item 1
of this Section shall be imposed:

First Violation                               P 2,500.00
Second Violation                             5,000.00
Third and Succeeding Violations      12,500.00

3. Failure to submit reportorial requirements.

First Violation                              P 2,500.00
Second Violation                             5,000.00
Third and Succeeding Violations      12,500.00

4. Failure to comply with the other provisions of this Circular is subject to payment of the following:

First violation            – P 10,000.00
Second Violation       – 15,000.00
Third Violation       – suspension, cancellation, or revocation of lay-up permit and Certificate of Accreditation of Lay-up Agent

5. For late payment of lay-up fees, there shall be assessed a
surcharge of 1.5% of the amount due per month as prescribed under item 3
of this Section.

VIII. REPEALING CLAUSE

Memorandum Circular No. 156 is hereby repealed. Any other MARINA
issuances otherwise inconsistent herewith is modified or amended
accordingly.

IX. SEPARABILITY CLAUSE

Should any provision or part of this Circular be declared by
competent authority to be invalid or unconstitutional, the remaining
provisions or parts hereof shall remain in full force and effect and
shall continue to be valid and effective.

X. EFFECTIVITY

This Circular shall take effect immediately upon publication once in a newspaper of general circulation.

Adopted: 27 Mar. 2009

By Authority of the Board:

(SGD.) MARIA ELENA H. BAUTISTA
Administrator