To facilitate the evaluation requests of cooperatives for the tax and duty free importation of machineries, equipment and spare parts under Article 62(1) of R.A. 6938, otherwise known as the Cooperative Code of Philippines, and in consonance with the procedural guidelines enunciated in DOF-CDA Joint Circular No. 1-90 dated November 7, 1990, the following guidelines are hereby prescribed and promulgated for the compliance and information of all concerned:

SECTION 1.       Documentary Requirements - Every applicant-cooperative for tax and duty free importation shall submit, in three (3) copies, the following documentary requirements to the CDA REGIONAL OFFICE WHERE THE APPLICANT-COOPERATIVE IS LOCATED.  TWO COPIES OF WHICH SHALL BE FORWARDED TO THE CENTRAL OFFICE WITH PRE-INSPECTION REPORTS AND FAVORABLE INDORSEMENT.

a.         Letter of intent to import machineries, equipment or spare parts duly signed by the majority of the members of the Board of Directors of the cooperative.

b.         Proforma Invoice/Deed of Donation and Acceptance of Donation.

c.         Letter-request OF THE APPLICANT-COOPERATIVE for a Certificate of Good Standing (SGS) WHICH SHALL BE ISSUED BY THE REGIONAL OFFICE, EXCEPT FOR THE ELECTRIC COOPERATIVES (ECs) WHICH SHALL BE ISSUED BY THE CENTRAL OFFICE for the purpose of importation.

d.         Copy of the Annual Report of the preceding year together with the Audited Financial Statements;

e.         Copy of the updated bond in accountable officers/employees of the cooperative;

f.          Minutes of the latest General Assembly Meeting and the results of election of directors;

g.         Board Resolution authorizing the representative to follow-up the request with CDA; and

h.         A sworn undertaking that the imported items shall be sued exclusively by the cooperative and its members.

SECTION 2.       CDA Issuance of a Favorable Indorsement - After the CDA has completed its evaluation of the application DOCUMENTS and has found the DOCUMENTS OF THE applicant cooperative to be IN ORDER, the Central Office shall immediately issue the favorable indorsement in favor of the requesting cooperative and the same shall be forwarded together with ONE COPY of the documents cited in Section 1 hereof to the Department of Trade and Industry (DTI) for its issuance of Certificate of Non-Local Availability, meaning the items requested to be imported are not manufactured or immediately available locally.

SECTION 3.       Inspection Before Issuance of Indorsement - (a) The CDA, through the Legal Officers of the extension office where the machineries, equipment or spare parts are to be installed or used, shall conduct a pre-inspection of the premises and the pertinent documents of the applicant-cooperative.  The Legal Officer shall be accompanied by the CDS II assigned in that particular area where the applicant-cooperative is located.

(b)            Authority to Pre-Inspect - Under no circumstances shall any extension office legal officer/CDS II conduct the pre-inspection without the necessary order or authority to do so either from the area director or from the Central Office.

(c)            Manner of Pre-Inspection - The inspection shall be conducted in the presence of the General Manager or any key officer of the cooperative during office hours.

(d)            Submission of Pre-Inspection Report - The Pre-Inspection Report shall be submitted to the ACTION OFFICER In-Charge of the importation of all cooperatives through the Area Director, the LRD Director and the Executive Director, within twenty four (24) hours after the conduct of the subject inspection.

SECTION 4.       Post Inspection of the Imported Articles - (a) The CDA, through the Legal Officer of the extension office, the CDS II assigned in the area AND THE CDA-DOF INSPECTION TEAM shall conduct the post-inspection of the items imported and released tax and duty free pursuant to Article 62 (1) of R.A. 6938 WHERE THE ITEMS WERE INSTALLED AND UTILIZED.

(b)            Submission of Post-Inspection Report - The Legal Officer/CDS II AND THE CDA-DOF INSPECTION TEAM shall submit their findings/report to the ACTION OFFICER In-Charge of the importation of all cooperatives COPY FURNISHED the Area Director, the LRD Director, the Executive Director and the Department of Finance (DOF).

(c)            Undertakings of the Cooperatives that Applied for Tax and Duty-Free Importation of Machineries, Equipment or Spare Parts - The Inspection Team shall see to it that the following undertakings are faithfully complied with by the cooperative that applied for tax and duty-free importation:

i.          That the body of the imported articles bear the printed words œEntered Tax and Duty-Free Under R.A. 6938 ;

ii.         That these articles are actually possessed and exclusively used by the cooperative as reflected in its books of accounts; and

iii.        That they shall not be transferred to any other person or entity for a period of five (5) years from the date of their importation.

(d)            Violation of Article 62 (1) and DOF-CDA Joint Circular No. 1-90 - Any violation found in the course of post-inspection, especially of the provision of Article 62(1) and DOF-CDA Joint Circular No. 1-90, shall be a ground for the cancellation or suspension of the privileges to import machineries, equipment and spare parts duty and tax-free, without prejudice to whatever administrative, civil or criminal liability that maybe initiated by the CDA or by any other appropriate government agency concerned.

SECTION 5.       Pre and Post Importation Log Book - THE REGIONAL OFFICES AND THE CENTRAL OFFICE SHALL MAINTAIN A SEPARATE LOG BOOK ON IMPORTATIONS. IT SHALL RECORD THE NAME OF THE APPLICANT-COOPERATIVE, THE ITEMS/ARTICLES BEING IMPORTED, THE POSSIBLE DATE OF ARRIVAL TO THE PORT OF DESTINATION AND OTHER PERTINENT AND IMPORTANT FACTS IN RELATION TO THE SAID IMPORTATION. THIS IS TO KEEP RECORDS FOR INSPECTION AND MONITORING PURPOSES.

SECTION 6.       Non-Waiver by the CDA of the Pre and Post Inspection Requirements - In no case shall the pre and post-inspection requirements be waived by the Authority in favor of the applicant cooperative.

SECTION 7.       Effect on Other Issuances - The provisions of existing rules and administrative issuances not otherwise repealed, modified or inconsistent with this Circular shall continue to have full and effect.

SECTION 8.       Effectivity - These guidelines shall take effect immediately.  This amends M.C. No. 04, s-1996.

Adopted: 9 Dec. 1996