Agricultural products
- Document symbol
- G/LIC/N/3/PHL/15/Rev.1
- Original language
- English
- Published on
- 21/02/2023
Outline of Systems
Q1. Give a brief description of each licensing system as a whole and, with respect to each, reply to the following questions as relevant, placing all of the material with respect to a given system in sequence together, and using cross references as appropriate when elements which have already been described are also present in another system.
Pursuant to Republic Act No.8178-Agricultural Tariffication Act of 1996, the Department of Agriculture is mandated to implement a Minimum Access Volume (MAV) mechanism for selected agricultural products taking into account the country's commitment under the World Trade Organization-Agreement on Agriculture (WTO-AoA). Under the MAV mechanism, an importer of MAV products must secure a MAV license for his volume allocation prior to importation.
Purposes and Coverage of Licensing
Q2. Identify each licensing system maintained and state what products, appropriately grouped, are covered.
The MAV mechanism is intended for an equitable and transparent mechanism for allocating the Minimum Access Volume (MAV) of agricultural products. This mechanism will be applied to 14 products at 4-digit level of the Harmonized System (HS) code, to wit: HS 0101 (Live Horses); HS 0102 (Live Cattle); HS 0103 (Live Swine); HS 0104 (Live Goats); HS 0105 (Live Chicken); HS 0201 (Beef); HS 0203 (Pork), HS 0204 (Meat of Goats); HS 0207 (Meat of Chicken); HS 0701 (Potatoes); HS 0901 (Coffee); HS 1005 (Corn); and HS 1006 (Rice). Please note that the administration of the MAV on HS 1701 (Sugar) is governed by the Sugar Regulatory Administration (SRA).
Q3. The system applies to goods originating in and coming from which countries?
The requirement applies to the above-mentioned products originating from any country.
Q4. Is the licensing intended to restrict the quantity or value of imports, and if not, what are its purposes? Have alternative methods of accomplishing the purposes been considered and if so which? Why have they not been adopted?
The licensing requirement is not intended to restrict the quantity or value of imports. It is being instituted to implement the TRQ commitment of the country and monitor the utilization of the allocated volumes of the MAV licensee. The DA is not considering any alternative methods to achieve the purpose mentioned above.
Q5. Cite the law, regulation and/or administrative order under which the licensing is maintained. Is the licensing statutorily required? Does the legislation leave designation of products to be subjected to licensing to administrative discretion? Is it possible for the government (or the executive branch) to abolish the system without legislative approval?
Is the licensing statutorily required?
Republic Act No. 8178 requires the licensing. RA No. 8178 provides that implementing rules and regulations shall be issued for the MAV rules. The following are the relevant rules in the implementation of the MAV:
• Administrative Order No. 52, series of 2000 – Administrative Order providing further amendments to the rules and regulations for the implementation of the agricultural Minimum Access Volume (MAV);
• Administrative Order No. 1, series of 1998, amending Administrative Order No. 8, series of 1997 – Rules and Regulations Implementing the Minimum Access Volume (MAV) Mechanism under the Department of Agriculture (DA); and
• Administrative Order No. 8, series of 1997.
Is it possible for the government to abolish the system without legislative approval?
This legislation cannot be abolished without a legislative approval.
Procedures
Q6. For products under restriction as to the quantity or value of imports (whether applicable globally or to a limited number of countries or whether established bilaterally or unilaterally):
Please see Answers 6.1-6.11.
Q6.I. Is information published, and where, concerning allocation of quotas and formalities of filing applications for licences? If not, how is it brought to the attention of possible importers? Of governments and export promotion bodies of exporting countries and their trade representatives? Is the overall amount published? The amount allocated to goods from each country? The maximum amount allocated to each importer? How to request any exceptions or derogations from the licensing requirement?
All regulations are circulated and made available to interested parties. They are also published in the Official Gazettes and/or in the national newspapers.
Q6.II. How is the size of the quotas determined: on a yearly, six-monthly or quarterly basis? Are there cases where the size of quota is determined on a yearly basis but licences are issued for imports on a six-monthly or quarterly basis? In the latter case, is it necessary for importers to apply for fresh licence on a six-monthly or quarterly basis?
Import quotas are determined on an annual basis. The tariff rate quota year is from February of a given year to January of the following year. Tariff quotas are allocated twice during the quota year. In February, the incremental quota for the quota year, the allocation of the prior quota year which have been recalled and any portion of the quota not taken up during the prior quota year are put together in a Beginning Year Pool (BYP) which is apportioned to license holders and new entrants. In July, the allocations surrendered or relinquished by licensees on or before the last working day of May of the quota year are put together in a Mid-Year Pool (MYP) which is reallocated to other qualified applicants.
Quotas are granted on the basis of an importer's past performance in relation to historical growth in sale. In the initial year of implementation, products covered by the TRQ mechanism are classified into two types: (a) those which have been imported regularly and in substantial volumes during the representative period; and (b) those which have been irregularly or scarcely imported. Allocation of licenses for regularly imported agricultural products is based on import shares. Meanwhile, irregularly imported products are allocated based on local output shares. Under this system of allocation, a portion of the licenses has, by necessity, been allocated to domestic producers. Subsequent entrants are accepted on the basis of import history.
Q6.III. Are licences allotted for certain goods partly or only to domestic producers of like goods? What steps are taken to ensure that licences allocated are actually used for imports? Are unused allocations added to quotas for a succeeding period? Are the names of importers to whom licences have been allocated made known to governments and export promotion bodies of exporting countries upon request? If not, for what reason? (Indicate products to which replies relate.)
Licenses are allotted for MAV applicants who have been in the business as an importer of a regularly or significantly imported MAV product; or who have been a user or a seller of an imported MAV product.
To ensure that licenses allocated are actually used for imports, MAV licensees/importers are required to obtain a MAV Import Certificate (MAVIC) from the MAV Secretariat which will be used in transacting with the Bureau of Customs (BOC) for the release of their imported MAV products.
Unused allocations are not added to the quotas for the succeeding period.
The list of licensees and their corresponding allocations are published in two newspapers of national circulation. Governments and export promotion bodies of exporting countries can readily have access to this information.
Q6.IV. From the time of announcing the opening of quotas, as indicated in I above, what is the period of time allowed for the submission of applications for licences?
The application period for regular allocations and access to the BYP of a MAV allotment year shall start on the first working day of November and ends at 5:00 PM on the last working day of November of the prior MAV year. The application period for access to the MYP shall open on the third working day of June and close at 5:00 PM on the first working day after 15 June of the MAV allotment year. Applications submitted after the close of these application periods shall not be accepted. Only applications submitted to and received by the MAV Secretariat shall be honoured.
Q6.V. What are the minimum and maximum lengths of time for processing applications?
The processing period of application for MAV licenses is approximately one month.
Q6.VI. How much time remains, at a minimum, between the granting of licences and the date of opening of the period of importation?
Once the MAV license is issued, the MAV licensee can undertake importation 15 days after the publication of the allocation for the MAV year.
Q6.VII. Is consideration of licence applications effected by a single administrative organ? Or must the application be passed on to other organs for visa, note or approval? If so, which? Does the importer have to approach more than one administrative organ?
Only one administrative body considers the application for license which is the MAV Secretariat of the Department of Agriculture, 4th Floor DA Building, Elliptical Road, Diliman, Quezon City. Email: mavsecretariat@yahoo.com. Telephone: (632)9201786.
Q6.VIII. If the demand for licences cannot be fully satisfied, on what basis is the allocation to applicants made? First come, first served? Past performance? Is there a maximum amount to be allocated per applicant and, if so, on what basis is it determined? What provision is made for new importers? Are applications examined simultaneously or on receipt?
The allocations of MAV licenses to applicants follows the outlined response in item III above and it is followed regardless of whether the demand for license is fully satisfied or not.
Q6.IX. In the case of bilateral quotas or export restraint arrangements where export permits are issued by exporting countries, are import licences also required? If so, are licences issued automatically?
Q6.X. In cases where imports are allowed on the basis of export permits only, how is the importing country informed of the effect given by the exporting countries to the understanding between the two countries?
Q6.XI. Are there products for which licences are issued on condition that goods should be exported and not sold in the domestic market?
Q7. Where there is no quantitative limit on importation of a product or on imports from a particular country:
Q7.a. How far in advance of importation must application for a licence be made? Can licences be obtained within a shorter time-limit or for goods arriving at the port without a licence (for example, owing to inadvertency)?
Q7.b. Can a licence be granted immediately on request?
Q7.c. Are there any limitations as to the period of the year during which application for licence and/or importation may be made? If so, explain.
Q7.d. Is consideration of licence applications effected by a single administrative organ? Or must the application be passed on to other organs for visa, note or approval? If so, which? Does the importer have to approach more than one administrative organ?
Q8. Under what circumstances may an application for a licence be refused other than failure to meet the ordinary criteria? Are the reasons for any refusal given to the applicant? Have applicants a right of appeal in the event of refusal to issue a licence and, if so, to what bodies and under what procedures?
Under what circumstances may an application for a licence be refused other than failure to meet the ordinary criteria?
All applications for MAV license are undertaken through online platform and reviewed by the MAV Secretariat. Applications are rejected if they are found to be lacking the required information and documentation.
Are the reasons for any refusal given to applicants?
Applicants are notified online if their applications are denied with notations on the deficiencies of their applications. But they can re-apply upon completion of the needed requirements. MAV licenses are approved online which the applicant can print.
Eligibility of Importers to Apply for Licence
Q9. Are all persons, firms and institutions eligible to apply for licences: (If not, is there a system of registration of persons or firms permitted to engage in importation? What persons or firms are eligible? Is there a registration fee? Is there a published list of authorized importers?) a) under restrictive licensing systems? b) under non-restrictive systems?
Under a restrictive licensing system, the following are the eligibility requirements in applying for a MAV License:
a) Eligibility Requirements in the First Year of Implementation of the MAV Mechanism
• A MAV applicant which has been in the business as an importer of a regularly imported or significantly-imported MAV product during the representative period shall be eligible for MAV licenses for Type A products.
• A MAV applicant which has been a user or a seller of an irregularly-imported or scarcely-imported MAV product during the representative period shall be eligible for MAV licenses for Type B products.
b) Subsequent Year Eligibility Requirements
• For products whose MAVs are fully subscribed, only persons, firms, cooperatives or any other legal entities which have operated a business involving the MAV product concerned as of the start of the prior MAV year and which have imported the minimum import volume for the MAV product concerned at any time during the immediately preceding twelve months but no later than the close of the application periods provided for the Beginning Year Pool (BYP) and the Mid-Year Pool (MYP) shall be eligible for applications from the BYP and the MYP for the MAV product concerned. The minimum import volume shall be equal to one-half of the pertinent economic size lots.
Full subscription of a MAV, for this purpose, shall be defined as the condition under which the volume available for allocation in either the 10 BYP or the MYP for a particular MAV product in a particular MAV allotment year is less than the sum of all the volume requests made by licensees qualified to apply for the BYP or the MYP, as the case may be, and MAV entrants, as reflected in their respective applications.
• For products whose MAVs are undersubscribed, persons, firms, cooperatives or any other legal entities which have not been in business involving the MAV product concerned as of the start of the prior MAV year and/or have not imported the minimum import volume for the same product shall be eligible for allocations from the BYP and the MYP for the MAV product concerned through the first-come first served allocation scheme, provided that the requirements of eligible licensees and MAV entrants for the MAV product concerned have been met.
Undersubscription of a MAV, for this purpose, shall be defined as the condition under which the volume available for allocation in either the BYP or the MYP for a particular MAV product in a particular year is more than the sum of all the volume request made by licensees qualified to apply for the BYP or the MYP as the case may be, and MAV entrants, as reflected in their respective applications.
Documentational and Other Requirements for Application for Licence
Q10. What information is required in applications? Submit a sample form. What documents is the importer required to supply with the application?
As proof of its track record, a person, firm, cooperative or any other legal entity which has operated a business involving a MAV product as of the start of the prior MAV year and has imported the minimum import volume for the same product during the same period shall submit the following documents as attachments to its application as MAV entrant:
• Department of Trade and Industry (DTI), Securities and Exchange Commission (SEC), or Cooperative Development Authority certificate of registration, whichever is applicable;
• Duly-notarized sworn statement to the effect that it had imported the MAV product concerned within the prior MAV year;
• Original and a copy of the Import Entry Revenue Declaration/s (IERD/s) pertinent to the importation/s made of the MAV product within the prior MAV year;
• Income tax return, or the appropriate Bureau of Internal (BIR) form for exempt organizations, for the latest fiscal year;
• Business permit issued by the Office of the Mayor for the current year; and
• Where appropriate, the most recent accreditation certificates from pertinent DA agencies.
a) A person, firm, cooperative or any other legal entity which has not operated a business involving the MAV product concerned as of the start of the prior MAV year and/or has not imported the minimum import volume for the same product but which applies for access to the BYP or the MYP for the MAV product, through the first-come-first-served allocation scheme, shall submit the following documents together with its application/s and the appropriate proof of import shipment:
• DTI, SEC, or CDA certificate of registration, whichever is applicable;
• Business permit issued by the Office of the Mayor for the current year; and
• Where appropriate, the most recent accreditation certificates from pertinent DA agencies.
c) A licensee in any given MAV allotment year applying for its regular allocation and allocation for the BYP in the subsequent MAV allotment year shall submit the following documents as attachments to its application as a regular licensee:
• Income tax return, or the appropriate BIR form for exempt organizations, for the latest fiscal year; and
• Business permit issued by the Office of the Mayor for the current year.
d) For applicants from areas outside the National Capital Region, all documents submitted in support of applications shall be verified by the MAV Secretariat Regional Unit in whose jurisdiction said applicants fall. These documents must bear a stamp which attest to the verification done by the Regional Unit concerned and signed by the staff concerned.
Q11. What documents are required upon actual importation?
The documents required upon actual importation are the MAV Import Certificate (MAVIC) and Sanitary and Phytosanitary Import Clearance (SPSIC). The MAVIC can be obtained by the Licensee online and is free of charge.
Q12. Is there any licensing fee or administrative charge? If so, what is the amount of the fee or charge?
The application for MAV License is free of charge.
Q13. Is there any deposit or advance payment requirement associated with the issue of licences? If so, state the amount or rate, whether it is refundable, the period of retention and the purpose of the requirement.
Conditions of Licensing
Q14. What is the period of validity of a licence? Can the validity of a licence be extended? How?
The license is valid for one for year and there is no extension.
Q15. Is there any penalty for the non-utilization of a licence or a portion of a licence?
All licensees utilizing less than 80% of their respective net allocations over a twelve-month period shall be penalized by having part of such allocations recalled for purposes of determining allocations in the succeeding MAV year. The utilization rate shall be reckoned as of 15 December, thereby effectively setting the utilization threshold at 70%, or 80% multiplied by 10.5 months from the regular allocation of a licensee in the following MAV year: (a) 50% of the unused out of the surrendered volumes in the first instance of failure to meet the utilization threshold in a MAV allotment year; (b) 75% of the unused out of the unsurrendered volumes in the second instance of failure to meet the utilization threshold; and (c) 100% of the unused out of the unsurrendered volumes in the third and succeeding instances of failure to meet the utilization threshold.
All licensees which surrender all or part of their respective allocations shall be penalized. The MMC shall recall the regular allocation of a licensee in the following MAV year 10% of the surrendered volumes of the licensee if such surrender is made on or before the last working day of May.
Q16. Are licences transferable between importers? If so, are any limitations or conditions attached to such transfer?
The MAV Licenses are non-transferrable.