On 26 April 2018, the Swiss Federal Department of Finance (FDF) Federal Customs Administration (FCA) issued Circular No. 071-16.1 PH R-30 regarding the entry into force on 1 June 2018 of the Free Trade Agreement between the EFTA States and the Philippines (FTA or Agreement).
The electronic customs tariff, Tares, will be amended on the date of entry into force to reflect the preferential rates set in the FTA. From the same date, the Philippines will no longer benefit from the preferences of the Generalised System of Preferences for developing countries (GSP). A summary of some of the more important customs-related provisions follow:
For the list rules which require a change in tariff heading or chapter, a general value tolerance of 20% of the ex-works price of the product for non-originating materials applies. This also applies in cases where a list rule requires “wholly obtained”. This tolerance shall not apply to list rules based on value criteria and to products for which the status of wholly obtained or produced referred to in Article 3 of Annex I is to be claimed.
The FTA provides for the cumulation of originating products between EFTA countries and the Philippines. Cumulation with products of other free trade partners is not permitted.
In the case of agricultural products not covered by Annex II, only bilateral cumulation of originating products is allowed, i.e. only between a single EFTA country (i.e. either Switzerland including Liechtenstein or Iceland or Norway) and the Philippines.
Only the origin declaration referred to in Article 13 of Annex I (see annex) shall be considered proof of origin. It may be issued by the exporter, irrespective of the value of the goods. The origin declaration is to be completed exclusively in English.
For most products in Chapters 25-97, tariff dismantling is asymmetric. While EFTA countries abolish their duties in one step on entry into force, the Philippines will gradually apply duty reductions/exemptions. Tariff dismantling can be seen in detail at the following links: for industrial products: Philippines Schedule of Tariff Commitments on non-agricultural products; for agricultural products: Tariff concessions Agriculture Philippines – Switzerland.
If no valid proof of origin exists at the time of the customs declaration, the person subject to the declaration obligation can request a provisional import assessment for goods that are covered by the Agreement. According to established administrative practice, the proof of origin has to be submitted within two months (period of validity of provisional assessment; moreover, the person subject to the declaration obligation can submit a written and substantiated request for an extension of the deadline before this period of validity expires).
If a provisional assessment was not requested, the customs declaration can be re- claimed at the preferential rate only if all of the prerequisites in accordance with Article 34 of the Customs Act are met in full. This means, among other things, that the proof of origin (even if issued retrospectively) must have existed at the time of the original customs declaration and that the person subject to the declaration obligation made a request to the competent customs office within the set timeframe (within 30 days after leaving customs supervision).