Strategic goods
- 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. 10697 also known as the Strategic Trade Management Act, authorizations/licenses are required for the export, re-export, reassignment, transit and transhipment, import, and provision of related services of strategic goods. The purpose of requiring authorizations/licenses is to prevent non-state actors from using legitimate businesses in the proliferation of weapons of mass destruction (WMD) and in particular to prevent the spread of chemical, biological, radiological, and nuclear weapons and their means of delivery.
Purposes and Coverage of Licensing
Q2. Identify each licensing system maintained and state what products, appropriately grouped, are covered.
Authorizations/ licenses are required for “strategic goods.” Strategic goods refer to products that, for security reasons or due to international agreements, are considered to be of such military importance that their export is either prohibited altogether or subject to specific conditions. Strategic goods are generally suitable to be used for military purposes or for the production of WMD. The National Strategic Goods List contains the list of strategic goods to be regulated by the Strategic Trade Management Office (STMO) and are divided into three annexes: Military Goods (Annex M), Dual-Use Goods (Annex N), and Nationally Controlled Goods (Annex O)
Please see Products
Q3. The system applies to goods originating in and coming from which countries?
The system applies to all countries without exception.
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 authorization/licensing system is not intended to restrict the quantity or value of imports. Instead, it is meant to maintain international peace and security by monitoring items that could be used in the proliferation of WMDs.
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?
Authorization/license of strategic goods is a requirement under Republic Act No. 10697, otherwise known as the Strategic Trade Management Act (STMA). Authorization/licensing is statutorily required. Further details on authorization/ licensing are also embodied in the STMA Implementing Rules and Regulations.
Is it possible for the government to abolish the system without legislative approval?
Authorization/licensing of strategic goods cannot be abolished without being repealed by another law passed by Congress.
Further information can be accessed through this link: https://www.dti.gov.ph/negosyo/strategic-trade-management/
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):
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?
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?
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.)
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?
Q6.V. What are the minimum and maximum lengths of time for processing applications?
Q6.VI. How much time remains, at a minimum, between the granting of licences and the date of opening of the period of importation?
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?
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?
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)?
Application for authorization/license should be lodged prior to the importation of the goods taking into consideration the processing time required by the Strategic Trade Management Office (STMO).
Processing time per type of authorization/license are the following: (1) Individual licenses which can be processed for a maximum period of 30 calendar days, (2) Global Licenses which can be processed for a maximum period of 90 calendar days, and (3) General Licenses which need not be applied for and can be immediately used by the industry stakeholders.
For import of strategic goods from countries with export control laws (similar with Strategic Trade Management Act), submission of export control certificate may expedite the processing time.
Q7.b. Can a licence be granted immediately on request?
No, a licence cannot 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.
There are no limitations as to the period of the year during which an application for authorization/ license of strategic goods may be made.
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?
The Strategic Trade Management Office is responsible for the processing of authorization/license application for the import of strategic goods. Items under the NSGL Codes 1A007, 1A008, 1C111, 1C227, 1C228, 1C229, 1C239, 3A229, 3A232, import authorization/license application should be lodged with the Philippine National Police – Firearms and Explosives Office (PNP-FEO).
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?
The following are the grounds under which an application for an authorization/ license may be denied pursuant to Section 6, Rule IV of the STMA Implementing Rules and Regulations:
Section 6. Grounds for Refusal to Issue an Authorization or Governmental End-Use Assurance. – The STMO shall refuse to issue an authorization or governmental end-use assurance on the following grounds:
(a) The applicant does not fulfil the conditions or requirements established by the STMA or its IRR;
(b) The strategic goods exported, transited, transshipped, re-exported, reassigned, or related services provided are in breach of UN Security Council sanctions or embargoes;
(c) The proposed export, import, transit, transshipment, re-export, reassignment, or provision of related services will impede the fulfilment of other Philippine international commitments or obligations;
(d) There is credible information that the strategic goods or related services will endanger national or international security, regional stability, or contribute to terrorist acts; and,
(e) There is credible information or risk that the proposed transaction will result in the diversion of strategic goods to an unauthorized end-user or end-use.
In deciding whether or not to grant the authorization, the STMO shall take into account all relevant considerations including the following:
(a) The national security or foreign policy interests of the Philippines, in particular, respect for international obligations and commitments under the UN Security Council sanctions, or relevant international treaties and non-proliferation agreements;
(b) Preservation of regional peace, security, and stability;
(c) Internal tensions or armed conflict in the destination country;
(d) The human rights and international humanitarian law;
(e) Terrorism or organized criminal activities;
(f) Security interests of a country which is an ally to the Philippines;
(g) Risk of illegal end-use or by a restricted party;
(h) Risk of diversion to an unauthorized end-user or end-use;
(i) Technical capacity of the recipient country;
(j) The applicant submitted false documents, made misleading representations, or concealed material facts in the application or appended materials;
(k) In the past five years, the applicant has violated the STMA or its IRR, or any other legal provisions related to state security;
(l) In the past five years, the applicant has violated an international embargo or sanction binding on the Philippines;
(m) Criminal or civil proceedings related to national security have commenced against the applicant;
(n) The goods for which the authorization is requested are under a police investigation procedure or court proceedings; and,
(o) Other relevant national security or foreign policy reasons.
Are the reasons for any refusal given to applicants?
Under the STMA, the STMO is required to state the reason for the denial of an authorization/ license.
Have applicants a right of appeal in the event of refusal to issue a licence?
Should an application for authorization/ license be denied by the STMO, an applicant may appeal to the National Security Council – Strategic Trade Management Committee (NSC-STMCom), the policy making body for all matters related to strategic trade management.
If so, to what bodies and under what procedures?
If the application is still denied by the NSC-STMCom, the applicant may still seek recourse to either the Court of Appeals or Supreme Court.
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?
Provided that prior to applying for an authorization, covered person shall register directly with the STMO.
Any natural or juridical person who engages or intends to engage in strategic trade may apply for an authorization/ license from the STMO.
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?
What information is required in applications?
The information required in the application form includes name, address, contact number, business activities, website address of the exporter, importer, recipient, consignee, end-user and third parties involved in the transactions as well as contact person’s name and designation, import details (mode of import, date/period, approximate time frame of the proposed activity, country of origin, country of consignment, and shipment route), and items to be imported (product description, NSGL Code, HS or CN Code, brand and model, quantity, total value, and end-use description).
What documents is the importer required to supply with the application?
The documents required to support the application are the following:
a) Technical specification, allowing the STMO to classify the commodity against the control list;
b) Copy/ies of relevant commercial documents, in particular, any sales contract, order confirmation, invoice, or dispatch note, if available;
c) Copy/ies of export control license if the goods come from a country with export control laws;
d) Copy/ies of relevant license/s or business permits, if applicable; and
e) Proof of payment of the processing fee.
Q11. What documents are required upon actual importation?
An import authorization issued by the STMO is a requirement prior to the importation of a strategic good.
Q12. Is there any licensing fee or administrative charge? If so, what is the amount of the fee or charge?
Not yet determined.
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.
None.
Conditions of Licensing
Q14. What is the period of validity of a licence? Can the validity of a licence be extended? How?
An individual license is valid for 2 years, global license for 5 years, and the general license is valid for a lifetime until amended or revoked by the STMO. A license may be extended for a fresh period of 2 years or 5 years upon renewal with the STMO. Definition of types of authorizations/licenses is available on this link:
https://www.officialgazette.gov.ph/downloads/2017/08aug/20170831-RA-IRR-10697-RRD.pdf
Q15. Is there any penalty for the non-utilization of a licence or a portion of a licence?
There is no penalty for non-utilization of an authorization/ license.
Q16. Are licences transferable between importers? If so, are any limitations or conditions attached to such transfer?
Authorizations/licenses are non-transferable.
Q17. Are any other conditions attached to the issue of a licence? a) for products subject to quantitative restriction? b) for products not subject to quantitative restriction?
The following are conditions incorporated in the authorization/ license:
(a) The authorization/license will be valid for the period stated in the STMA or as specified by the STMO.
(b) The strategic good/s shall be shipped only to the designated end-user. Moreover, should the goods be exported to another country, person, or entity, the same may not be done without the STMO’s permission.
(c) The applicant will immediately inform the STMO if he or she becomes aware of information concerning the use of goods, in whole or in part, for the development, production, use, maintenance, stockpiling, detection, identification, or dissemination of weapons of mass destruction, means of their delivery, for military purposes in an embargoed destination, or for purposes of endangering national security.
(d) The strategic goods or technology are not known, believed, suspected, or intended to be used in relation to a nuclear, chemical, or biological weapons program, or missiles capable of delivering these weapons.
(e) The applicant assures that it will keep in its principal place of business, for a period of ten (10) years from the date of the completion of the transaction, all records of the transaction and/or books of account, business, and computer systems and all commercial and technical data related to the transaction, including:
i. The description of the strategic good/s or related services;
ii. The quantity and the value of the strategic good/s or value of the related service provided;
iii. The name and address of the parties in the transaction or activity;
iv. The end-use and end-user of the strategic goods or related services;
v. The date of the transaction or activity;
vi. The particulars of the recipient and end-user of the goods, document, or technology;
vii. The document issued by the relevant authority of the country from or through which the goods, document, or technology were imported allowing such goods to be imported to the country, transmitted, acquired or disposed of;
viii. The end-user certificate or statement;
ix. The invoice issued in relation to the sale of the relevant goods, document, or technology;
x. The bill of lading or the airway bill; and,
xi. The contract for the acquisition or disposal of the goods, document or technology to which the permit relates.
(f) The STMO may require the applicant to submit post-delivery verification certificate issued by the appropriate authorities of the destination country after the export, import, transit, transshipment, re-export, or re-assignment of strategic goods.
(g) The STMO may at any time require the records to be audited and verified by an authorized officer.
(h) Every authorization holder shall allow the records or documents of covered transactions to be inspected and copied by an authorized officer.
(i) The applicant assures that the STMO will be immediately informed should there be any changes in the particulars or information submitted in the authorization application.
Other Procedural Requirements
Q18. Are there any other administrative procedures, apart from import licensing and similar administrative procedures, required prior to importation?
If the applicant would like to avail of a global license, the only condition prior to import is that the company must have an Internal Compliance Program.