EXECUTIVE ORDER NO. 444
EXECUTIVE ORDER NO. 444 - AMENDING
EXECUTIVE ORDER NOS. 250, 250-A s. 1995 AND 419 s. 1997 IMPLEMENTING
THE RATIONALIZATION OF DUTY FREE STORES/OUTLETS AND THEIR OPERATIONS IN
THE PHILIPPINES PURSUANT TO EXECUTIVE ORDER NO. 140 s. 1993 AND FOR
OTHER PURPOSES
WHEREAS,
Executive Order No. 140 dated 30 November 1993 provides for the
rationalization of duty free stores/outlets and their operations in the
Philippines in order to enhance their conformity with generally
observed practices in most countries and to avoid their possible
adverse impact on local enterprises;
WHEREAS, Executive Order No. 250 dated 2 June 1995, as amended,
implements such rationalization by modifying policies and improving
certain operational aspects of duty free stores/outlets in the
Philippines;
WHEREAS, there is a need to further modify policies and guidelines
affecting the duty free stores/outlets in order to prevent abuse of
duty free privilege and to protect local industries from unfair
competition;
WHEREAS, the Clark Special Economic Zone will be an important site for
the year-round 100th anniversary celebration of the Philippine
Independence in 1998;
WHEREAS, the operation of the duty free shops/outlets in the Subic
Special Economic and Free Port Zone and Clark Special Economic Zone,
but under proper and strict limitations, is needed to enhance domestic
tourism and help generate support for the centennial activities;
NOW, THEREFORE, I, FIDEL V. RAMOS, President of the Republic of the
Philippines, by virtue of the powers vested in me by law, do hereby
order the following:
Section 1. Disallowing the Establishment of New Duty
Free Shops, Reiterated. — As mandated under Executive Order No. 419
dated 16 June 1997, the establishment of new duty free shops/outlets
and the expansion of existing ones shall no longer be allowed, except
as may be authorized by existing laws.
Sec. 2. Limiting Duty Free Shops Operations In
International Ports of Entry and Fenced-in Areas of Freeport Zones. —
The operation of duty free shops shall be allowed only within the
country’s international ports of entry and the fenced-in areas of the
freeport zones, except as provided in the succeeding section for a
limited period as indicated.
Sec. 3. Special Shopping Privileges Granted During
the Year-round Centennial Anniversary Celebration in 1998. — Upon
effectivity of this Order and up to the Centennial Year 1998, in
addition to the permanent residents, locators and employees of the
fenced-in areas of the Subic Special Economic and Freeport Zone and the
Clark Special Economic Zone who are allowed unlimited duty free
purchases, provided these are consumed within said fenced-in areas of
the Zones, the residents of the municipalities adjacent to Subic and
Clark as respectively provided in R.A. 7227 (1992) and E.O. 97-A s.
1993 shall continue to be allowed One Hundred US Dollars (US$100)
monthly shopping privilege until 31 December 1998. Domestic tourists
visiting Subic and Clark shall be allowed a shopping privilege of US$25
for consumable goods which shall be consumed only in the fenced-in area
during their visit therein.
Sec. 4. Grant of Duty Free Shopping Privileges
Limited Only To Individuals Allowed by Law. — Starting 1 January 1999,
only the following persons shall continue to be eligible to shop in
duty free shops/outlets with their corresponding purchase limits:
a.
Tourists and Filipinos traveling to or returning from foreign
destinations under E.O. 97-A s. 1993 — One Thousand US Dollars
(US$1,000) but not to exceed Ten Thousand US Dollars (US$10,000) in any
given year;
b. Overseas
Filipino Workers (OFWs) and Balikbayans defined under R.A. 6768 dated 3
November 1989 — Two Thousand US Dollars (US$2,000);
c. Residents,
eighteen (18) years old and above, of the fenced-in areas of the
freeports under R.A. 7227 (1992) and E.O. 97-A s. 1993 — Unlimited
purchase as long as these are for consumption within these freeports.
The term “Residents” mentioned in item c above shall refer to
individuals who, by virtue of domicile or employment, reside on
permanent basis within the freeport area. The term excludes (1)
non-residents who have entered into short- or long-term property lease
inside the freeport, (2) outsiders engaged in doing business within the
freeport, and (3) members of private clubs (e.g., yacht and golf clubs)
based or located within the freeport. In this regard, duty free
privileges granted to any of the above individuals (e.g., unlimited
shopping privilege, tax-free importation of cars, etc. ) are hereby
revoked.
Sec. 5. Allowable Items in Duty Free
Stores/Outlets. — The range of items to be sold in all duty free
stores/outlets shall be limited only to consumables, light and heavy
durables, and television sets of sizes not manufactured in the
Philippines, subject to the following conditions:
a.
Imported heavy durables shall only be sold to balikbayans, OFWs and
residents of the secured and fenced-in area of freeports. In availing
of this privilege, the following shall be presented as proof of
entitlement:
1.
Filipino citizen who has been continuously out of the country for at
least one (1) year from date of last departure:
—
Philippine Passport showing date of last departure
2.
Foreign passport holder (Balikbayan):
—
Passport and any one of the following:
•
Old Philippine Passport
• Foreign
naturalization papers to show former Philippine citizenship
•
Certification from adopted country
3.
Filipino OCW or Filipino Overseas Worker (OFW):
—
Passport and any of the following:
•
POEA-approved contract of employment
• Certificate
of employment by the foreign employer
• Certificate
of employment by the Philippine Embassy/Consulate
• Prior year’s
income tax return to prove gainful employment abroad
• Seaman’s
Service Record Book
Family members of the balikbayan
who are traveling with the balikbayan should present:
—
Passport and any of the following:
•
Birth certificate, in the case of children
• Marriage
certificate, in the case of the spouse
• Adoption
papers, in the case of legally adopted children.
b. Duty free
stores/outlets are restricted from selling the following heavy durables
to tourists and Filipinos arriving from foreign destinations:
1.
Television sets of sizes made or manufactured in the Philippines;
2. Karaokes/videokes not using laser disk or CD
videos;
3. Stereos;
4. Residential type ovens and ranges;
5. Washing machines with capacity of not more than 10
kilograms;
6. Furniture;
7. Kitchenware;
8. Refrigerators of not more than 15 cubic feet top
mount;
9. Electric fans;
10. Airconditioners; and
11. Basic and prime commodities as indicated in the
price watch list.
c. The sale of
all locally manufactured goods in duty free stores shall be encouraged,
subject to the rules and regulations of the Department of Finance.
d. No
sensitive/critical agricultural products shall be sold in all duty free
stores. These products include rice, sugar, corn, corn starch, flour,
coffee beans, garlic and other products that may be determined by the
Duty Free Oversight Committee created under EO 250.
Sec. 6. Pull-out of Duty Free Goods, Prohibited. —
The pull-out of duty free goods from the Freeport and Special Economic
Zones into a customs territory or the practice of allowing duty free
operators to sell their goods outside the freeport and special economic
zones, even after paying the tax therefor, is hereby prohibited. Thus,
goods that are originally imported duty free shall only be sold at the
duly authorized duty free shops.
Sec. 7. Requirement of Pre-shipment Inspection Of
Goods. — Goods which are brought into the Freeport and Special Economic
Zones shall be covered by a pre-shipment inspection scheme to be
conducted by an organization which is duly authorized by the Secretary
of Finance after 30 days from the effectivity of this Order. The fees
for the pre-inspection scheme shall be shouldered by the concerned
importer. Prior to the implementation of the pre-shipment scheme, the
Commissioner of Customs is authorized to inspect shipments of goods to
the Freeport and Economic Zones to ensure correctness of the
declaration of their contents and values.
Sec. 8. Control Measures To Curb Abuses of Duty
Free Privileges. — The Bureau of Customs, in close coordination with
the Zone authorities and other concerned agencies is hereby tasked to
implement strict control measures to curb the abuses of the duty free
privilege. Among others, these should include but not limited to the
following:
a.
Place special permanent labels on duty free items with the following
inscription: “Not for resale, imported duty free”;
b. Conduct
thorough background checks on duty free shop operators to ascertain
track record;
c. Implement a
computerized accounting system to track the duty free operations; and
d. Create an
Internal Audit team to conduct regular spot checks on the operation of
duty free stores/outlets.
Sec. 9. Administrative Sanctions. — Violation of
any of the provisions of this Order shall be subject to administrative
sanction of suspension or cancellation of the operation of the
concerned duty free shop under the implementing rules and regulations
to be prepared by the Department of Finance.
Sec. 10. Separability Clause. — The provisions of
this Executive Order are hereby declared separable. In the event that
provisions of this Executive Order are declared illegal or
unconstitutional, the other provisions not so declared shall remain in
full force and effect.
Sec. 11. Amending Clause. — All provisions of
executive orders, letters of instruction, issuances, memoranda and
proclamations not consistent with the provisions of this Executive
Order are hereby repealed or modified accordingly.
Sec. 12. Effectivity. — This Executive Order shall
take effect immediately.
Done in the City of Manila,
this 26th day of September in the year of Our Lord, Nineteen Hundred
and Ninety-Seven.
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