Republic Of The Philippines
TARIFF COMMISSION
Quezon City

COMMISSION ORDER NO. 02-01

RULES AND REGULATIONS TO GOVERN CONDUCT OF FORMAL
INVESTIGATION BY THE TARIFF COMMISSION ON THE WITHDRAWAL
AND/OR SUSPENSION OF CONCESSIONS UNDER SECTION 402
OF THE TARIFF AND CUSTOMS CODE OF THE PHILIPPINES

Section 1. Determination of Prima Facie Case. Within ten (10) working days from receipt by the Tariff Commission (the "Commission") of a properly documented petition and a completed TC Form No. 4 together with catalogs/brochures, technical specifications or chemical composition of the product under consideration including samples and the audited financial statements of the petitioner domestic industry, the Technical Team shall submit an "issue paper" or preliminary report to the collegial body for decision whether a prima facie case exists to merit the initiation of a formal investigation.
The preliminary report shall contain findings on the following elements:
1. product comparability (whether like product or directly competitive product);
2. increase in the volume of imports of the like or directly competitive product;
3. serious injury or threat thereof to the domestic industry; and
4. causal link between the increased imports and the serious injury or threat thereof.

Section 2. Notice of Public Consultation. Within five (5) working days from the decision of the collegial body to conduct Section 402 investigation, the Commission shall cause the publication of the notice of public consultation in two (2) newspapers of general circulation.

The Notice shall contain the name of the Petitioner/s, the nature of the petition, trade/commodity classification and description of the article/s involved, HS Heading number/s and rate/s of duty, the date, time and place of the consultation and a concise summary of the petition.

The Notice of the schedule of the Public Consultation by the Commission shall likewise be posted on the Bulletin Board of the Commission. Copies of said notice shall be furnished to the Petitioner/s, Oppositor/s, trade and commercial organizations and government agencies concerned at least two (2) days prior to the scheduled date. The Commission may use personal service, fax, telegram, electronic mail and ordinary mail in the service to the parties of the notices, decisions, orders and resolutions.

Section 3. Nature of Formal Investigation. The investigation of the Commission is fact-finding and administrative in nature and shall be conducted in a summary manner. No dilatory tactics or unnecessary delays shall be allowed and the technical rules on evidence as provided under the Rules of Court shall not be applied.

ection 4. Public Consultation. The Commission, after due notice to the parties, shall conduct a one (1) day consultation to give all interested parties affected a reasonable opportunity to be heard, to present evidence, to respond to the presentations of other parties and to submit their views, inter alia, whether the application of Section 402 would be in the public interest.

Section 5. Presiding Officer. The Public Consultation on the merits shall be presided by the Chairman and Member Commissioner/s or by any one of them.

Section 6. Procedure of Public Consultation. All interested parties may appear at the Public Consultation and present, under oath, evidence relevant and material to the subject matter of the investigation. The order of the Consultation shall be as follows:
a. Clarificatory questions to be propounded by the Oppositor;
b. Petitioner may answer the clarificatory questions of the Oppositor;
c. Clarificatory questions to be propounded by the Petitioner;
d. Oppositor may answer the clarificatory questions of the Petitioner.

Section 7. Methods of Obtaining Information. The Commission shall be allowed access to records of any interested party or be provided the necessary information in order to expedite the investigation.

The Commission shall also conduct ocular inspection/s, examine and/or verify books of accounts and financial statements, hold conferences and consultations with the producers, traders, representatives of labor and consumers, and send correspondence to other interested parties, domestic and foreign.

The Commission may, in addition to the pertinent records, information and submissions made by the parties, request information, advice, views and recommendations from the Department of Trade and Industry, Department of Agriculture, Department of Environment and Natural Resources, the Bangko Sentral ng Pilipinas, Department of Foreign Affairs, the Board of Investments and from other sources as it may deem appropriate.

Section 8. Determination of Increased Volume of Imports. The Commission shall, in determining if the product (under investigation) is being imported into the Philippines in increased quantities due to unforeseen developments and the effect of the grant of tariff concessions, take into account the recentness, suddenness, sharpness and magnitude of the increase which can be considered significant.

Section 9. Determination of Serious Injury or Threat Thereof. The Commission shall, in determining that the increase in importation of the product under consideration is causing serious injury or threat to a domestic industry producing like products or directly competitive products, evaluate the following relevant factors:
(1) The rate and amount of the increase in imports of the products concerned in absolute and relative terms;
(2) The share of the domestic market taken by the increased imports;
(3) Changes in the level of sales, production, productivity, capacity utilization, employment, profits and losses.

The Commission shall evaluate information on injury and increased imports covering the previous three (3) year period prior to the submission of the application. If the submission was made in the second semester of the current year, the information shall cover the previous three (3) years and the period of the current year for which statistical information is available. However, the period may be adjusted to cover a shorter period in order to take into account other considerations that will ensure the appropriateness of the chosen period, e.g. seasonality of the product, availability of data.

In the determination of serious injury, the Commission shall take into account all relevant economics factors, including but not limited to the following:
(1) Decline in sales or market share and downward trend in production, profits, wages, productivity or employment in the domestic industry and its inability to generate capital for modernization or maintain existing levels of expenditures to research and development;

(2) Inability of a significant number of firms to carry out domestic production at a profit;

(3) Significant idling of productive facilities including the closure of plants or underutilization of production capacity and increase in domestic inventory;

(4) Significant unemployment or underemployment within the domestic industry;

(5) Significant reduction in the market share as a proportion of estimated market demand;

(6) Growing inventories of the product being investigated whether maintained by Philippine producers, importers, wholesalers or retailers.

While a determination of threat of serious injury shall include the following:

(1) Significant increase in imports into the Philippines evidenced, among others, by the existence of letters of credit, supply or sales contract, award of a tender, an irrevocable offer or other similar contracts;

(2) Decline in sales or market share and downward trend in production, profits, wages, productivity or employment in the domestic industry and its inability to generate capital for modernization or maintain existing levels of expenditures to research and development;

(3) Sufficient freely disposable or an imminent substantial increase in production capacity of the foreign exporters including access conditions they face in third country markets indicating the likelihood of substantially increased exports to the Philippines; and

(4) Growing inventories of the product being investigated whether maintained by Philippine producers, importers, wholesalers or retailers.

Section 10. Determination of Causal Link Between Increased Imports and Serious Injury or Threat Thereof. - In making determination with respect to substantial cause, the Commission shall take into account the effects of the increased imports on the economic factors and indices relating to the serious injury or threat thereof as supplied by the domestic industry.

The extent of injury on the domestic industry caused by the importation of the products shall be determined by the Commission upon examination of all relevant evidence. Such determination shall not be made unless the investigation demonstrates, on the basis of objective evidence, the existence of causal link between the increased import of the product under consideration and serious injury or threat thereof to the domestic industry. Any known factors, other than increased importation of the products under consideration which at the same time injure the domestic industry, shall also be examined and the injuries caused by these factors must not be attributed to the increased importation of the said product.

The effects of the increased imports of the product under consideration shall be assessed in relation to the domestic production of the like product or directly competitive product by separate identification of that production based on such criteria as production processes, sales and profits. If such is not possible, the effects of the increased imports of the product under consideration shall be assessed by the examination of the product of the narrowest group or range of products which includes the like or directly competitive product for which the necessary information is available.

Section 11. Position Paper. Within seven (7) calendar days from the termination of the public consultation, the parties shall submit their position paper to the Commission. Non-submission of position papers by the parties shall cause the archiving of their application.

Section 12. Submission of Draft Report of Findings for Collegial Deliberation. Within twenty (20) working days after the public consultation, a draft report of findings shall be submitted for Collegial Deliberation.

Section 13. Report of the Commission. The Commission shall submit its report of findings and recommendation within thirty (30) days after the termination of the public consultation to the National Economic and Development Authority ("NEDA") for consideration of the Committee on Tariff and Related Matters ("CTRM").

The report shall include a description of the short and long term effects of the recommendation on the petitioner, the domestic industries, the consumers, the workers, and the communities where production facilities of such industry are located.

The Commission, after the submission of the report to the NEDA, shall make it available to the public except those of confidential information and publish a summary in two (2) newspaper of general circulation.

Section 14. Venue of Public Consultation. Unless otherwise decided by the Commission, the public hearing shall be conducted at the Conference Room of the Tariff Commission, 5/F Philippine Heart Center Building, East Avenue, Diliman, Quezon City.

Section 15. Counsel of Record. Any party who signs a document filed pursuant to these Rules and Regulations on behalf of any party shall be the Counsel of Record for the party and shall continue in that capacity until a change, if any, is made. A party in a proceeding may change the party's counsel of record by serving the Commission a Notice of Change of Counsel signed by the new counsel and agreed to by the previous counsel.

Section 16. Mode of Service. Only personal or special courier service of pleadings, i.e. position papers, motions, memoranda, manifestations, and notices, to the Commission shall be allowed.

Parties, if they agree, may make service thru fax or electronic mail. In which case, the date of the transmission shall be deemed to be the date of the service. In case of voluminous pleadings or documents and/or numerous parties, the Commission, upon proper motion, may waive the requirement of service PROVIDED, a copy, together with the annexes, is filled with the Commission and is made available for examination and reproduction and the notice of such filing and availability is duly served on the parties.

Section 17. Fees. Pursuant to Executive Order No. 159 and the provision of 511 of the Tariff And Customs Code of the Philippines as amended, the Commission shall, for purposes of implementing the investigation, collect the following fees and charges:
(a) Filing Fee ------------------------- P120.00/ article

(b) Cost of Investigation -------------- P2000.00/ one or more but not exceeding five (5) articles falling under the same heading or chapter.

*The filing fee of P120.00 shall be deducted to the cost of investigation of P2000.00.

The cost of publication which covers the following notices: Notice of Public Consultation and Notice of the Termination of Investigation, shall be charged against the petitioners.

Non-payment of the cost of investigation and publication within five (5) calendar days from notice of billing is an indication that the Protestant is not serious in pursuing the formal investigation and such may cause the suspension of the formal investigation and the running of the time for the Commission to complete its formal investigation.

Section 18. Transcript of the Proceedings. In all proceedings before the Commission, it shall be the duty of the Commission's stenographer to take down all notes in the proceedings and immediately thereafter, shall transcribe thereof and file the same with the records of the case, duly certified, initialed on each page and signed on the last page. It shall be made available to all interested parties for a fee.

Section 19. Effectivity. The foregoing Rules and Regulations shall take effect immediately from the date of the filing of three (3) certified copies thereof with the University of the Philippines Law Center, Diliman, Quezon City.

Quezon City, November 14, 2002.


EDGARDO B. ABON
Chairman