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 Mitsubishi Motors Corporation along with Indonesia, Malaysia and
Thailand;

WHEREAS, under the Mitsubishi BBC Schemes approved on an ad referendum
basis by Indonesia on 12 August 1996, by Malaysia and Thailand on 16 September
1996 and by the Philippines on 4 October 1996, the Philippines will import from
Indonesia, Malaysia and Thailand certain component parts for the original
equipment manufacture (OEM) of completely knocked-down (CKD) of Lancer (Models
LA/LM/C/E/MG) passenger cars, L200 (PB/P-CAR) and Colt L300 light commercial
vehicles, in exchange for Philippine exports of complementary component parts
to the three participating countries;

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. MMC/3/A/96, MMC/5/A/96, MMC/7/A/96, MMC/11/A/96 and
MMC/16/A/96 issued on 23 December 1996 in favor of Mitsubishi Motors
Corporation are existing products, i.e., already being manufactured at the time
of their approval as BBC products;

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 10 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 11, 12, 13, and 14 of Annex “A”.

SEC. 2. The MOP provided on the articles specifically listed in Annex “A”
shall be accorded exclusively to the BBC entity in Indonesia (P.T. Krama Yudha
Tiga Berlian Motors KTB), to the BBC entity in Malaysia (Perusahaan Otomobil
Nasional Sdn Bnd (PROTON) and to the BBC entity in Thailand (MMC Sittipol Co.,
Ltd. MSC) effective from 1 January 1997 up to December 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
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, 2004.

SEC. 3. 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. 4. Upon the effectivity of this Executive Order, the articles
specifically listed in the aforesaid Annex “A” which are entered or
withdrawn from warehouses in the Philippines for consumption shall pay the
applicable BBC Preferential Tariff specified under Section 1 hereof, subject to
qualification under the Rules of Origin as prescribed in the Agreement on ASEAN
Preferential Trading Arrangements, as amended.

SEC. 5. Any revision/s to the part numbers appearing in Column 4 of Annex
“A” 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. 6. This Executive Order shall take effect immediately.

Done in the City of Manila, this 15th day of September 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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