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This page features the full text of
Republic Act No. 7471
"Philippine
Overseas Shipping Development Act"
AN
ACT TO PROMOTE THE DEVELOPMENT OF PHILIPPINE OVERSEAS SHIPPING
REPUBLIC
ACT NO. 7471AN
ACT TO PROMOTE THE DEVELOPMENT OF PHILIPPINE OVERSEAS SHIPPING
Section
1. Title. — This Act shall be
known and cited as the "Philippine Overseas Shipping Development
Act."
Sec.
2. Declaration of Policy. — It
is hereby declared the policy of the Government of the Philippines
to:
(a) Develop
and maintain a Philippine Metropolitan Marine composed of
well-equipped,
safe and modern vessels most suited for, Philippine requirements and
conditions,
manned by qualified Filipino officers and crew, and owned and operated
under the Philippine flag by citizens of the Philippines or by
associations
or corporations organized under the laws of the Philippines, at least
sixty
percent (60%) of the capital of which is owned by citizens of the
Philippines;
chanrobles virtuallaw libraryred(b) Assist
in the development, recovery and expansion of Philippine overseas
shipping
capable of meeting the requirements of the expanding international
trade
of the Philippines;
(c) Provide
assistance to Philippine Shipping enterprises and encourage the long
range
vessel acquisition development modernization and expansion through
private
investments without direct government financial assistance; and
(d) Create
a Healthy climate to attract private enterprises.
Sec.
3. Definition. — As used this
Act: chanrobles virtuallaw libraryred
(a) "Philippine
overseas shipping" means the transport of goods and/or passengers by a
ship owned and operated under the Philippine flag by a Philippine
shipping
enterprise, except when the ship is operated solely between ports in
the
Philippines; chanrobles virtuallaw libraryred(b) "Philippine
shipping enterprise" means a citizen of the Philippines or an
association
or corporation organized under the laws of the Philippines, at least
sixty
percent (60%) of the capital of which is owned by citizens of the
Philippines
and engaged exclusively in Philippine overseas shipping;
(c) "MARINA"
means the Maritime Industry Authority; chanrobles virtuallaw libraryred
(d) "Monetary
authority" means the Central Bank of the Philippines and any other
agency
in charge of foreign exchange controls; and
(e) "Regulation"
means the rules and regulations promulgated pursuant to Section 10
hereof.
Sec.
4. Foreign Exchange Requirements.
— Foreign exchange requirements of Philippine Shipping enterprises for
the purchase of oceangoing vessels for registration under the
Philippine
flag, for repair or improvement of vessels, for importation of engines,
spare parts, accessories, supplies, containers and for other expenses
required
for the operation of vessels in foreign ports or in the high seas, when
recommended by the MARINA, shall be made available to the Philippine
shipping
enterprise subject to the regulations.
chanrobles virtuallaw libraryred
Sec.
5. Acquisition of Oceangoing
Vessels. — Philippine shipping enterprises may likewise acquire
oceangoing
vessels for Philippine overseas shipping upon approval by the MARINA,
subject
to the guidelines prescribed in the regulations: Provided, That:
(a) The
funds utilized in the acquisition of the vessel are financed from
sources
other than the Philippine banking system; chanrobles virtuallaw libraryred(b) No
guaranty of the monetary authority or of any Philippine government or
private
financial institution is granted or extended for the purpose; chanrobles virtuallaw libraryred
(c) The
vessel serves as sole collateral for the financing of the vessel and no
other asset of the Philippine shipping enterprise is pledge, mortgaged,
or used as security in case of default;
(d) All
foreign exchange requirements for the servicing of the loan, the
operation,
maintenance and repair of the vessel, the purchase of supplies and
related
equipment shall be financed solely from earnings derived from the
operation
of the vessel and no foreign exchange shall be made available by the
monetary
authority and the Philippine banking system for these purposes;
(e) Mortgage
documents and/or other financial agreements shall be filed with the
monetary
authority and such other government agencies in charge of such mortgage
formalities; and chanrobles virtuallaw libraryred
(f) Any
excess foreign exchange earning shall be inwardly remitted and
surrendered
to the Philippine banking system.
Sec.
6. Exemption from Import Duties
and Taxes. — The importation by a Philippine shipping enterprise of
oceangoing
vessels for registration under the Philippine flag shall be exempt from
the payment of import duties and taxes. The spare parts for the repair
and/or overhaul of vessels shall likewise be exempt from the payment of
import duties and taxes: Provided, That such items are destined or
consigned
either to:
(a) A
Philippine dry-docking or repair facility, accredited by the MARINA and
registered as a customs-bonded warehouse, which will undertake the
necessary
repairs and works on the vessel; and chanrobles virtuallaw libraryredchanrobles virtuallaw libraryred(b) The
vessel in which the items are to be installed: Provided That, if such
items
are found in locations other than the two (2) aforementioned ones or in
places not authorized by customs, the person or entity in possession of
such items shall be subject to full duties and taxes, including
surcharges
and penalties.
Local
manufactures or dealers who sell machinery, equipment, materials and
spare
parts to a Philippine shipping enterprise shall be entitled to tax
credits
for the full amount of import duties and taxes actually paid thereon,
or
on parts or components thereof, subject to the approval of the
Secretary
of Finance, upon the recommendation of the MARINA.chanrobles virtual law library
Sec.
7. Exemption from Income Tax.
— A Philippine shipping enterprise shall be exempt from payment of
income
tax on income derived from Philippine overseas shipping for a period of
ten (10) years from the date of approval of this Act: Provided, That:chanroblesvirtualawlibrary
(a) The
entire net income, after deducting not more than ten percent (10%)
thereof
for distribution of profits or declaration of dividends, which would
otherwise
be taxable under the provisions of Title II of the National Internal
Revenue
Code, is reinvested for the construction, purchase, or acquisition of
vessels
and related equipment and/or in the improvement of modernization of its
vessels and related equipment in accordance with the regulations;
and chanrobles virtuallaw libraryredchanrobles virtuallaw libraryred(b) The
cumulative amount so reinvested shall not be withdrawn for a period of
ten (10) years after the expiration of the period of income tax
exemption
or until the vessel or related equipment so acquired have been fully
paid,
whichever date comes earlier.chanrobles virtual law library
Any
amount not so invested or withdrawn prior to the expiration of the
period
stipulated herein shall subject to the corresponding income tax,
including
penalties, surcharges and interests.
chanrobles virtuallaw libraryred
Sec.
8. Registration and Deletion
of Vessels. — All vessels owned by Philippine shipping enterprises and
availing of the incentives under this Act shall be registered under the
Philippine flag. Said vessels can only be deleted from the Philippine
registry
after the MARINA has determined that:
(a) No
other Philippine shipping enterprise is interested in acquiring the
vessel;
or chanrobles virtuallaw libraryredchanrobles virtuallaw libraryred(b) The
vessel has to be scrapped.chanrobles virtual law library
Sec.
9. Requisition of Vessels. —
The President of the Philippines may, in times of war and other
national
emergency, requisition absolutely or temporarily, for any naval or
military
purpose, any and all vessels of the Philippine registry. The Government
shall pay the owner or operator of the vessel, based on normal
conditions
at the time of requisition;
(a) The
fair market value, if the vessel is taken absolutely, or chanrobles virtuallaw libraryred(b) The
fair charter value, if the vessel is taken temporarily.chanrobles virtual law library
In
case of disagreement, such fair value shall be determined by an
arbitration
committee composed of:
(a) One
(1) member to be appointed by the MARINA; chanrobles virtuallaw libraryredchanrobles virtuallaw libraryred(b) One
(1) member to be appointed by the owner or operator of the vessel;
and chanrobles virtuallaw libraryred
(c) One
(1) member to be appointed by the two (2) members so appointed.
The
decision of the arbitration committee shall be final and binding on
both
parties.
chanrobles virtuallaw libraryred
Sec.
10. Rules and Regulations. —
The MARINA, in consultation with the monetary authority and the
Department
of Finance, shall jointly formulate and promulgate the rules and
regulations
necessary for the implementation of this Act taking into consideration
the policies and programs of the Government for the development of the
Philippine overseas shipping.chanrobles virtual law library
Sec.
11. Annual Report. — The MARINA,
in coordination with the monetary authority and the Department of
Finance,
shall submit an annual report to the President of the Philippines and
the
Congress of the Philippines on the implementation of this Act, which
report
shall include:
(a) The
amount of foreign exchange earned, acquired and spent by Philippine
shipping
enterprises;chanrobles virtuallaw libraryredchanrobles virtuallaw libraryred(b) The
amount of income tax and import duties and taxes for which exemption
have
been granted;
(c) The
additional oceangoing vessels constructed, purchased or acquired, the
improvement
made thereon and the additional related equipment procured; and
(d) Such
other information as the MARINA may deem necessary or the President of
the Philippines may require.
Sec.
12. Penal Provisions. — Violation
of the provisions of this Act or the rules and regulations promulgated
to implement the same shall be punished by a fine of not more than Ten
thousand pesos (P10,000) or imprisonment for not more than five (5)
years,
or both such fine and imprisonment, at the discretion of the court.chanrobles virtuallaw libraryred
chanrobles virtuallaw libraryred
If
the violation is committed by an association or corporation, the
penalties
prescribed hereunder shall be imposed on the president the chief
executive
officer and the other officials and employees responsible for the
violation.chanrobles virtual law library
If
the violation is committed by a government official or employee, he
shall,
in addition to the penalties prescribed hereunder, be dismissed from
the
government service with all administrative penalties accessory
thereto. chanrobles virtuallaw libraryred
Sec.
13. Repealing Clause. — All laws,
executive orders, regulations, or parts thereof, inconsistent with the
provisions of this Act are hereby repealed, amended or modified
accordingly.cralaw:red
Sec.
14. Effectivity Clause. — This
Act shall take effect fifteen (15) days after its publication in at
least
two (2) newspapers of general circulation. chanrobles virtuallaw libraryred
Approved:
May 5, 1992
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