CHAPTER 3: TRADING REGULATIONS

1. Export Regulations
a. Registration – First time exporters need to register with the Client Profile Registration
System (CPRS) through the Philippine Exporters Confederation.
b. Required Documents – businesses exporting out of the Philippines must provide the
following documents before their goods depart.
i. Packing list
ii. Invoice
iii. Bill of Landing
iv. Export License
v. Customs Export Declaration; and
vi. Certificate of Origin

Certain products require government permission to be exported, including:

- Endangered species of flora and fauna (Bureau of Biodiversity Management);

- Animals and animal products (Bureau of Animal Industry);
- Fish and fish products (Bureau of Fisheries and Aquatic Resources);
- Plants (Bureau of Plant Industry);
- Rice (National Food Authority);
- Radioactive materials (Philippine Nuclear Research Institute) and;
- Sugar and molasses (Sugar Regulatory Administration).

c. Tariffs and Taxes

The only exported good which incur a tariff are logs at 20 percent.

2. Import Regulations
a. Registration – steps:
i. Obtain the Import Clearance Certificate (Bureau of Internal Revenue) - valid
for 3 years
ii. Register with the Bureau of Customs (BOC)
iii. Create an account on the Client Profile Registration System (CPRS) – to be
updated every year
b. Required documents upon receiving:
i. Packing List
ii. Bill of Landing
iii. Invoice
iv. Import Permit
v. Origin Certificate
vi. Import Declaration

*Importers bringing in animals, plants, foodstuff, medicine or chemicals must

additionally obtain a Certificate of Product Registration from the Food and Drug
Administration.

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Figure 1: Flowchart of the General Import Procedures
Retrieved from https://dtiwebfiles.s3-ap-southeast-1.amazonaws.com/Negosyo/Imports/Import+Facilitation/Annex+A+-+Flowchart+of+the+General+Import+Procedures.pdf
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IMPORT FACILITATION

1. Free Importation and Exportation – refers to goods that may be freely imported into and
exported from the Philippines without the need for import and export permits, clearances or
licenses, unless otherwise provided by law or regulation. (Chapter 3, Section 116 CMTA)

2. Regulated Importation and Exportation – goods which are subject to regulation shall be
imported or exported only after securing the necessary goods declaration, clearances,
licenses, and any other requirements, prior to importation. In case of importation, submission
of requirements after arrival of the goods, but prior to release from customs custody shall be
allowed, but only in cases provided for by governing laws or regulations. (Chapter 3, Section
117 CMTA). For the list of regulated goods and their administering agencies, you may visit the
Philippine National Trade Repository (PNTR) at http://www.pntr.gov.ph/.

3. Restricted Importation and Exportation – except when authorized by law or regulation, the
importation and exportation of the following restricted goods are prohibited: (Chapter 3,
Section 119 CMTA)

 Dynamite, gunpowder, ammunitions and other explosives, firearms and weapons of war, or
parts thereof;
 Roulette wheels, gambling outfits, loaded dice, marked cards, machines, apparatus or
mechanical devices used in gambling or the distribution of money, cigars, cigarettes or other
goods when such distribution is dependent on chance, including jackpot and pinball machines
or similar contrivances, or parts thereof;
 Lottery and sweepstakes tickets, except advertisements thereof, and lists of drawings therein;
 Marijuana, opium, poppies, coca leaves, heroin or other narcotics or synthetic drugs which
are or may hereafter be declared habit forming by the President of the Philippines, or any
compound, manufactured salt, derivative, or preparation thereof, except when imported by
the government of the Philippines or any person duly authorized by the Dangerous Drugs
Board, for medicinal purposes;
 Opium pipes or parts thereof, of whatever material;
 Any other goods whose importation and exportation are restricted;
 Weapons of mass destruction and goods included in the national Strategic Goods list (NSGL)
as provided under Republic Act No. 10697 or the Strategic Trade Management Act (STMA);
 Toxic and hazardous goods under Republic Act No. 6969 or the “Toxic Substances and
hazardous and Nuclear Wastes Control Act of 1990.”
 The restriction to import or export the above stated goods shall include the restriction on their
transit.

4. Prohibited Importation and Exportation – the importation and exportation of the following
goods are prohibited: (Chapter 3, Section 118 CMTA)

 Written or printed goods in any form containing any matter advocating or inciting treason,
rebellion, insurrection, sedition against the government of the Philippines, or forcible
resistance to any law of the Philippines, or written or printed goods containing any threat to
take the life of, or inflict bodily harm upon any person in the Philippines;

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  Goods, instruments, drugs and substances designed, intended or adapted for producing
unlawful abortion, or any printed matter which advertises, describes or gives direct or indirect
information where, how or by whom unlawful abortion is committed;
 Written or printed goods, negatives or cinematographic films, photographs, engravings,
lithographs, objects, paintings, drawings or other representation of an obscene or immoral
character;
 Any goods manufactured in whole or in part of gold, silver or other precious metals or alloys
and the stamp, brand or mark does not indicate the actual fineness of quality of the metals or
alloy;
 Any adulterated or misbranded food or goods for human consumption or any adulterated or
misbranded drug in violation of relevant laws and regulations;
 Infringing goods as defined under the Intellectual Property Code and related laws; and
 All other goods or parts thereof which importation are explicitly prohibited by law or rules and
regulations issued by the competent authority.

 Special Economic Zones

Businesses operating in Special Economic Zones (SEZs) or free port zones are exempted from
paying taxes and tariffs on imported raw material and manufacturing equipment. All exporters and
importers operating in SEZs or free port zones must register with either PEZA or the specific free port
regulator. As stipulated in the Customs Modernization and Tariff Act, 2015, the main SEZs in the
Philippines include:

 Clark Freeport Zone;

 Poro Point Freeport Zone;
 John Hay Special Economic Zone;
 Subic Bay Freeport Zone;
 Cagayan Special Economic Zone;
 Zamboanga City Special Economic Zone and;
 Freeport Area of Bataan.

 What Is a Free Trade Agreement (FTA)?

A free trade agreement is a pact between two or more nations to reduce barriers to imports and
exports among them. Under a free trade policy, goods and services can be bought and sold across
international borders with little or no government tariffs, quotas, subsidies, or prohibitions to inhibit
their exchange.

As a member of the Association of Southeast Asian Nations (ASEAN), the Philippines is naturally a
participant in the ASEAN Trade in Goods Agreement (ATIGA). The country enjoys significantly reduced
tariff rates within the ASEAN through some tariff lines on sensitive food products still remain. The
Philippines, by virtue of its membership in ASEAN, is also a party to the five FTAs that ASEAN has signed
with and includes:

 Philippines – Japan Economic Partnership Agreement (PJEPA) – the only bilateral FTA
 ASEAN Free Trade Agreement (AFTA)
 ASEAN-Australia-New Zealand Free Trade Agreement (AANZFTA)

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  ASEAN-China Free Trade Agreement (ACFTA)
 ASEAN-India Free Trade Agreement (AIFTA)
 ASEAN-Japan Comprehensive Economic Partnership Agreement (AJCEPA)
 ASEAN- Korea Free Trade Agreement (AKFTA)

3. The Concept of Food Defense

Food Defense is an important element in protecting one’s business and consumers from internal
and external threats. It encompasses a range of potential threats from relatively common tamper
hoaxes to less probable terrorist attacks.

Some notable food contaminations/frauds:

a. The city of Dalles, Ore (1984) – more than one fourth of the city’s salad bars were
intentionally contaminated with Salmonella typhimurium by the local Rajneeshee cult
members. The purpose had been to sicken enough of the population that voter turnout
would be reduced, and the Rajneeshee turnout percentage thereby increased, so as to
put their candidates into two of the three county Circuit Court seats on the ballot.
b. Anthrax attack (2001) - 22 people were sickened by four postal letters that were
intentionally contaminated with anthrax spores and mailed to political and media offices.
In addition to the five people being killed and 17 injured from contact with the spores, the
incident caused postal workers and the public, across the U.S., to fear touching, much less
opening, any mail.
c. The 1996 willful tainting of a Texas hospital’s breakroom snacks by a disgruntled employee
that caused illness in 12 people.
d. The 2003 insecticide contamination of 200 pounds of beef by a Michigan supermarket
employee that caused 92 people to become ill.
e. The China melamine contamination of baby formula and pet food.
f. Sudan dyes in spices
g. False labelling of puffer fish as monkfish
h. The plasticizer di(2‐ethylhexyl)phthalate (DEHP) being used as a cheaper substitute of
clouding agents in food and beverages

The motivation or root-cause for Food Defense is the intent to cause harm to consumers or
companies. This is different than the motivation for Food Fraud that is exclusively for economic gain.
Therefore, Food Defense prevention requires a different approach than the control of unintentional
food safety hazards (HACCP) and Food Fraud prevention.

Food Defense defined:

 “The process to ensure the security of food and drink from all forms of intentional malicious
attack including ideologically motivated attack leading to contamination.” - Global Food Safety
Initiative (GFSI)
 “The procedures adopted to assure the security of food and drink and their supply chains from
malicious and ideologically motivated attack leading to contamination or supply disruption.”
- (PAS 96:2017)
 “The effort to protect food from intentional adulteration from acts intended to cause wide-
scale harm to public health, including acts of terrorism targeting the food supply.” - (FDA Food
Defense fact sheet)

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Table1. Differences between Food Safety and Food Defense (adopted from Maczka, 2008)
Parameters Food Safety
(Unintentional/Naturally
Occuring Contamination)
Outcomes May involve many illnesses but
few deaths
Contaminants/Agents
a. Biological E. coli O157:H7 in hamburger ,
Salmonella in peanut butter,
Listeria monocytogenes in
berries
b. Chemical Pesticide residues
Cyanide
Veterinary drug residue
c. Physical Metal, bone, rodent droppings
d. Radiological
Methods of Analysis Risk Assessment
Prevention and Control Good Agricultural Practices
Strategies (GAP), Good Animal
Husbandry Practices (GAHP),
Good Aquaculture Practices
(GaqP), Good Hygienic
Practices (GHP), Good
Manufacturing Practice (GMP),
Sanitation Standard Operating
Procedures (SSOP), Hazard
Analysis and Critical Control
Points (HACCP).
Decontamination and Disposal Can be cooked or sent to
landfill. Sanitation procedures
should be sufficient for
cleaning the facility before
resuming food production.
Contamination Food safety education needed
for general public and good
risk communication strategies
needed by industry and
government.
Food Defense
(Intentional Contamination)
Has potential to result in many
deaths
Heat Resistant: Bacillus
anthracis (anthrax),
Clostridium botulinum
Heat Sensitive: Yersinia pestis
(plague), Vibrio cholerae
Heat Resistant: arsenic, rat
poison
Heat Sensitive: ricin
Nails
Plutonium-238, Cesium-137
Vulnerability Assessment
Measures or actions taken to
reduce the impact of
intentional food
contamination at vulnerable
points in a facility (e.g.
personnel and physical
security) as well as
government or industry-wide
measures (e.g. surveillance,
outreach training).
Contaminated food may be
hazardous waste. Need to
identify decontamination
techniques and confirm facility
is free of residual contaminant
before resuming food
production.
Much public concern,
therefore extra consideration
is needed when developing
risk communication and public
education messages
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Developing a Food Defense Plan

A Food Defense Plan is a written plan to reduce the risk of intentional contamination with low-
cost or no-cost mitigation measures. It assesses the risk of an attack and identify control measures to
minimize the risk.

A Food Defense Plan achieves the following:

• Helps protect product and customers
• Maintains a safe working environment for employees
• Increases establishment preparedness and facilitates appropriate response to an emergency
• Enhances establishment security
• Helps protect a company’s bottom line

An effective Food Defense Plan starts with well-implemented prerequisite programs (ex. GMP
and SSOP programs). Some information that will be used to create a Food Defense Plan may already
exist in a company’s SSOP, Food Recall and HACCP Plans. A Food Defense Plan does not require the
development of another HACCP-type document. However, a HACCP plan should not be used as a
substitute for a Food Defense Plan because not all of the critical control points will be the same,
considering the differences between food safety and food defense.

A functional Food Defense Plan may be developed following these steps:

1. Development of a Food Defense Plan by conducting vulnerability assessment;
2. Implementation of the Food Defense Plan by using the defense measures identified;
3. Testing the Food Defense Plan by periodic monitoring of the effectiveness of the defense
measures;
4. Periodic assessment of the Food Defense Plan by reviewing the plan and revising as necessary
especially if new risks are discovered; and
5. Maintaining and sustaining the implementation of the Food Defense Plan to ensure that
defense measures are being implemented and are effective.

The Basic Food Defense Plan (Base components):

1. Outside Security
1.1 property perimeter
1.2 building perimeter
1.3 vehicles

2. General Inside Security

2.1 facility/plant
2.2 utilities
2.3 laboratory
2.4 process computer systems

3. Logistics, Production and Storage Security

3.1 suppliers and vendors
3.2 shipping and receiving
3.3 incoming shipments
3.4 processing and production

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 3.5 live animals
3.6 outgoing shipments
3.7 returned products/goods
3.8 ice/water/processing aids
3.9 storage and warehouse
3.10 hazardous materials/chemicals

4. Management
4.1 personnel security
4.2 food defense plan

A Basic Food Defense Plan should detail the basic information about the company and the
basic food defense mitigation measures. Records of implementation of these controls should be
generated. Monitoring and verification of implementation should likewise be done through reviews,
assessments and audits. Food Defense Plans should be tested for effectiveness. Where plans are weak
in preventing intentional food contamination, improvements should be carried out.

Food Defense Documents and Records

Some recommended documents and records to effectively carry out the Food Defense Plan
include the following:

Documents
• Vicinity Map
• Floor Plan
• Emergency Evacuation Plan
• Crisis Management/Contingency Plan
• Human Resource (HR) Training Program
• Traceability and Recall Program
• Personnel Security Measures

Records
• Hourly Security Roving Report
• Training Attendance Record
• Daily Attendance Record
• Visitor/Suppliers Entry Slips
• Loading/Unloading Inspection Report
• Product Recall Exercise Form
• Chemical/Hazardous Material Control Log
• Food Defense Plan Review Form
• Record of Food Defense Plan Testing
• CCTV Recordings

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