Pursuant to Section 3 of SRA Sugar Order No. 6, Series of 2005-2006, dated January 30, 2006, the following Implementing Rules and Regulations (IRR) are hereby promulgated for the Countertrade Sugar Swap Program (CSSP) as authorized by Presidential Memorandum Order No. 206, dated 23 February 2006, to wit:

1. Allocation and Monitoring of Additional U.S. Export Quota Under the Countertrade Sugar Swap Program (CSSP)

1.1 The volume of 50,000 MTCW U.S. Quota under the CSSP should be the additional volume of raw sugar over and above the regular U.S. Quota of 137,353 MTCW where both quotas have to be filled up for quota year 2005-2006.

1.2 The 50,000 MTCW additional U.S. Quota shall be distributed to all qualified exporters to serve as their export allocations under the CSSP.

1.3 Exporters who wish to participate in the CSSP shall have until April 7, 2006 to confirm their volumes and shipping schedule/s of departure with the SRA.

 

The confirmation shall include an Undertaking duly notarized (Annex œA ^* ) which states among others, that failure to export the confirmed volume of œA  sugar under the program which is manifested by the failure to deliver/submit to the SRA the œA  quedans for verification Fifteen (15) days prior to the shipping schedule/s of departure as stated therein, an appropriate penalty shall be imposed upon the exporters by the SRA.

1.4 In the event that the subject 50,000 MTCW additional quota has been undersubscribed after April 7, 2006, the SRA shall re-allocate the unconfirmed volume proportionately to those qualified exporters who had confirmed their volumes on or before the aforecited date.

2. Exporters Eligible to Export Under the CSSP

2.1 Only exporters who confirmed (pursuant to Art. 1 par. 1.3) and with œA  or U.S. Export sugar quedans verified by the SRA, per schedule prescribed in S.O. No. 8, Series of 2005-2006, dated 07 March 2006, the volume of sugar 50,000 MTCW for QY 2005-2006 U.S. Quota through the PITC.

3. Documentation for Export

3.1 Existing SRA rules and regulations shall apply

3.2 The following export documents shall be issued by the SRA to sugar exporters:

3.2.1 Withdrawal Authority (WD)
3.2.2 In-Loading Authority (IL)
3.2.3 Out-Loading Authority (OL)

3.3 Export Clearance issued to the BOC
3.4 List of Shippers by Vessel issued to the PITC
3.5 Certificate for Quota Eligibility (CQE) issued to exporters
3.6 Certification on Export Documents issued by PITC.

4. Export Shipment Schedule

4.1 The export shipment under the program should arrive at the port of destination not later than September 30, 2006.

5. Allocation and Monitoring of Imports Under the CSSP

  5.1 The 50,000 MTCW of refined sugar subject of importation under the program shall be distributed among eligible importers as described in Article 6 hereof to serve as their allocations to import through the PITC.

 

However, as a result of undersubscription of the 50,000 MTCW U.S. Export Quota, the import allocations shall also be adjusted accordingly per Section 1.4 hereof.

5.2 Eligible importers of the CSSP shall have until May 15, 2006 to confirm their volumes and shipping arrival/s with the SRA.

5.3 Failure of the concerned importers to confirm with the SRA their allocated import volumes and shipping schedule/s under the program within the specified period per Section 5.2 hereof, shall result to a re-allocation of the SRA to interested parties on a œFirst-Come, First-Served-Basis , however, those who has complied with Sugar Order No. 8, Series of 2005-2006, shall be given priority.

5.4 Imports upon arrival shall be classified as œC  or Reserve sugar as indicated in the SRA clearance to be issued for withdrawal from the Bureau of Customs (BOC).

 

However, the aforesaid SRA clearance shall only be issued after the participating eligible importer of the program had submitted to the SRA among others, proof that the imported sugar, which is tariff free, is covered by a Surety Bond issued by a reputable surety/insurance company, or Bank Guarantee/Standby Letter of Credit (LC) or any other guarantee acceptable to SRA, in favor of the SRA, to cover at least the tariff/duties due the imported sugar.

5.5 The imported refined sugar classified as œC  or Reserve sugar upon arrival shall remain as œC  sugar and cannot be disposed of to the domestic market until such time that the said sugar has been re-classified into œB  or Domestic sugar by the SRA.

Re-classification of a particular volume of œC  sugar into œB  or Domestic sugar shall only take effect immediately after submission to the SRA of the export documents mentioned in Sections 3.2.1 to 3.2.3 hereof as proof of positioning the sugar in the loading port for export to the U.S., provided no reclassification into œB  sugar shall take effect prior to June 1, 2006 (Shipment schedule of Art. 8).

5.6 In the event that no export or only partial volume of export under the program had been made, the volume of imported œC  sugar corresponding to the volume of sugar that was not exported shall remain as œC  or Reserve sugar and at the appropriate time deemed necessary by the SRA, shall be re-classified into œB  or Domestic Market Sugar (and its covering tariff/duties shall be paid to the BOC through the SRA) or œD  sugar for re-export to the world market (and no corresponding tariff/duties shall be paid to the BOC).

5.7 A Circular Letter shall be issued by the SRA as rules and regulations for the effective monitoring of the imported sugar under the program classified as œC  or reserve sugar to ensure its proper disposition into its designated market.

6. Importers eligible to Import Under the CSSP

6.1 Only exporters with œA  or U.S. Export sugar-quedans verified by the SRA as of March 7, 2006 (The date of the Sugar Board meeting after Memorandum Order No. 206 was issued and the date Sugar Order No. 8, Series of 2006 was approved and signed), which volume of sugar shall serve as the basis for their proportionate allocations, are deemed eligible to import the 50,000 MTCW of refined sugar from the world market through the PITC. The excess of verified quedans above the basic quota of 137,353 mt as of March 7, 2006 shall be distributed to the participating exporters based on the same pro rata sharing.

7. Documentation for Import

7.1 Existing SRA rules and regulations shall apply.

7.2 All pertinent documentation to secure tariff and duty free entry shall be the responsibility of the PITC.

8. Import Shipment Schedule

8.1 The import shipment under this program should arrive in the Philippines not earlier than June 1, 2006 and latest shipment date shall be the B/L dated not later than July 31, 2006.

8.2 Shipment arrival/s prior to June 1, 2006 shall be classified as œC  or Reserve sugar and its reclassification from œC  sugar shall be pursuant to Sections 5.5 and 5.6 hereof.

8.3 Shipment arrival/s after the B/L dated July 31, 2006 shall be subject to appropriate penalty of the SRA and its re-classification from œC  sugar shall be pursuant to Sections 5.5 and 5.6 hereof.

9. Export/Import Under the CSSP Through the PITC

9.1 Pursuant to Presidential Memorandum Order No. 206, dated 23 February 2006 and SRA Sugar Order No. 6, dated 30 January 2006, all export/import of sugar of the exporters/importers under the CSSP shall be through the PITC in accordance with the herein prescribed guidelines.

10. Producers ™ Participation in the Countertrade Sugar Swap Program (CSSP)

10.1 Sugar production of the previous crop year 2004-2005 shall be the basis for the import participation of the sugar producers in the CSSP as defined in Article 10.2 hereof.

10.2 Aside from the existing liens imposed on sugar importation, an additional import lien to be determined based on market conditions at the time of import, for the benefit of the sugar industry shall be imposed on the 50,000 MTCW of refined sugar imported under the CSSP and shall be collected and distributed pro-rata by the SRA among the producers (Planters and Millers) through their major sugar federations, namely CONFED, NFSP, UNIFED, PANAYFED and LUZONFED (for platers), PSMA, PIMA, AIM (for millers) plus the unaffiliated producers, basis of which is defined in Section 10.1 hereof.

Additional implementing rules and regulations when deemed necessary by the SRA in order to ensure the compliance of all concerned for the success of the Countertrade Sugar Swap Program shall be issued from time to time.

This Circular Letter shall take effect immediately.

Adopted: 17 March 2006

(SGD.) JAMES C. LEDESMA
Administrator

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^* Text Available at Office of the National Administrative Register, U.P. Law Complex, Diliman, Quezon City