citi TRADE a nous DEPARTMENT ORDER NO. 18 - 12 2 Series of 2018 Subject : PROCEDURAL GUIDELINES ON MONITORING AND ENFORCEMENT AMENDING DEPARTMENT ORDER NO. 48, SERIES OF 2008 OR THE DEPARTMENT OF TRADE AND INDUSTRY GENERAL ENFORCEMENT GUIDELINES FOR TRADE AND INDUSTRY AND CONSUMER CASES WHEREAS, Department Order No. (D.0.) 48 s. 2008 or the Department of Trade and Industry (DT!) General Enforcement Guidelines for Trade and Industry And Consumer Cases was issued on 29 September 2008, establishing a uniform guidelines for the monitoring and enforcement of persons, natural or juridical, whose products and services fall under the jurisdiction of the DTI; WHEREAS, on 2 June 2014, the Fair Trade and Enforcement Bureau (FTEB) was created pursuant to Executive Order No. 366, authorizing the rationalization of the processes and structure of certain government agencies; WHEREAS, there is a need to align D.O. No. 48 s. 2008 with the approved Rationalization Plan and to implement the shifts in functions of the bureaus or offices involved; NOW WHEREFORE, by virtue of the applicable provisions of Executive Order No. 292, otherwise known as the Administrative Code of 1987, Executive Order No. 913, Series of 1983, and Republic Act No. 7394, otherwise kniown as the Consumer Act of the Philippines, this Department Order is hereby issued for the information and guidance of those concemed: SECTION 1. SCOPE. These guidelines shall govern all Department of Trade and Industry (DTI) officials and personnel duly authorized to perform monitoring, surveillance, enforcement activities, and other functions relevant thereto. SECTION 2. COVERAGE. These guidelines shall apply to all monitoring, surveillance, and enforcement activities on establishments engaged in the manufacture, importation, distribution, supply, and/or retail of products falling under the jurisdiction of DTI pursuant to Republic Act No. 7394 or the Consumer Act of the Philippines and other Trade and Industry Laws and Regulations. SECTION 3. DEFINITION OF TERMS - For purposes of this Order the following definitions shall apply: 3.1. ENFORCEMENT - act of compelling observance or compliance with laws, rules and regulations including but not limited to undertakings submitted in relation to an application filed or to a written directive issued by the DTI PFATIENNE TOHE auarecORt MA, CARLA HLARDE Head, Records Section Department of Trade & Indistry3.2, EVIDENCE - any object, document, or testimony officially prosented to support a claim 3.3. FORMAL CHARGE (FC) - A written statement of ultimate facts, signed and sworn to by the duly authorized officer or representative of the initiating office or agency, filed by any office or agency of the DTI, charging any person (natural or juridical) with any violation of the Consumer Act, Price Act, or any Other Trade and Industry Laws or Regulations. 3.4. MONITORING — An activity where DTI observes, checks, and keeps track of the goods, products, operations or services of private business entities to ensure conformance to and compliance with existing DT! laws and regulations, 3.5. NOTICE OF VIOLATION (NOV) ~ a notice to a person or establishment that certain laws or regulations implemented by DTI may have been violated, with a directive to appear or submit a written explanation why no legal action should be taken. 3.6. PRELIMINARY PREVENTIVE ORDER — an Order as provided in Section 11 of E.0. 913, s. 1983, issued to the owner or representative of the establishment for the seizure of the goods which are subject of an investigation or the padlocking of the warehouse, building, or structure where the said goods are contained or stored; or the withholding of such goods or products if for any reason the possession thereof has passed to the Department for the purpose of preventing the disposition or tampering of the evidence, the continuation of the acts being complained of, and the flight of the respondent. 3.7. SHOW CAUSE ORDER (SCO) ~ A directive issued by DTI to a person or entity to explain why no action shall be taken against it. 3.8. STANDARDS — a document, established by consensus and approved by a recognized body, that provides, for common and repeated use, rules, guidelines or characteristics for activities or their results, aimed at the achievement of the optimum degree of order in a given context. (ISO/IEC Guide 2:2004) 3.9. SURVEILLANCE - an aativity conducted to closely observe identified establishments against whom possible non-conformity or non-compliance with DTI rules or orders were reported or found 3.10. TECHNICAL FILE - a set of documents that describes a product and can prove that the product was designed according to the requirements of a standard or technical regulation. (Market Surveillance, WTO-TBT, 2009) 3.11. TECHNICAL REGULATION - an issuance that provides technical requirements, either directly or by referring to or incorporating the content of a standard, technical specification or code of practice with which compliance is mandatory. Cénricten Tous whidFOGOPY ake MA. CARLA YVETTE L. ILARDE Head, Records SectibAge2 of 7 Department of Trade & IndustrySECTION 4. CREATION OF TEAMS ~ Several teams shall be created for purposes of this D.O. 44, ATeam shall be created by at least the FTEB Director or by the Regional or Provincial Director in the Regional or Provincial Office, respectively. The team may be bureau/office team or a composite team; 4.2. It shall be composed of at least two members and the number thereof shall depend on the nature and scope of activity or operation; 4.3, Each Team shall be led by a duly designated Team Leader who shall not hold a position higher than a Division Chief; 4.4, Deployment of Team/s may be on a regular basis or on a per need basis; 45. DTI may invite an observer or expert from industry associations, academe, consumer organizations, or other agencies during the conduct of its monitoring and enforcement activities. SECTION 5. AUTHORITY TO CONDUCT - This shall take the form of an Office Order or Memorandum Order signed by at least a Director or his/her designated Officer-in-Charge authorizing the conduct of monitoring, surveillance, enforcement or a combination thereof. A corresponding Travel Order shall be issued in accordance with applicable DTI rules. SECTION 6. DUTIES AND RESPONSIBILITIES. The Team Leader as well as the members shall observe the following: 6.1. TEAM LEADER 6.1.1. Ensure that appropriate authority is secured; 6.1.2. Make an overall plan regarding the conduct of the activity; 6.1.3. Brief the team members of such plan; 6.1.4. Identify the logistics needed and ensure its availability during the actual conduct of the activity 6.1.5. Ensure that invited observers or experts are duly authorized and equipped with valid Identification Cards by the entity or group being represented; 6.1.6. Ensure that members of the team attend relevant seminars or trainings, 6.1.7. Sign the Incident Report prepared by his/her member; 6.1.8. Sign and issue the Notice of Violation, depending upon the circumstances; 6.1.9. Decide whether or not nonconforming products/goods shall be sealed in the premises of the establishment and/or be withdrawn and placed in the DTI designated holding area, when applicable; 6.1.10. Prepare and submit a post activity report to the Head of Office. 6.2. MEMBERS Know the relevant laws and regulations; Observe the code of conduct and ethics of government officials and employees; Obey legal instructions or directives from the head of the team; Immediately inform or relay to the Team Leader any information or complaint received or gathered; 6.2.5. Verify any reports or complaints received or gathered; 6.2.6. Take photographs of the premises and subject products or goods; 6.2.7. Conduct and prepare an Incident Report together with an Inventory of Goods or Products within the period of the team’s activity, have the same signed by the Team Leader and its members, as well as by the ‘owner or representative of the subject private busiggss entity and CERTIEIEA TANK DURTABORES OY ook, Page 3 of7 Ma. canuslnbere L WARDE Head, Records Section Department of Trade & Induptryleave a copy thereof to said owner or representative, in accordance with DAO No. 17, Series of 1992 and relevant COA Rules and Regulations; SECTION7. BASES OF THE NEED TO CONDUCT MONITORING, SURVEILLANCE, OR ENFORCEMENT. — Monitoring, Surveillance, and Enforcement activities or operations are based either from DTI's motu proprio mandate to conduct the same or from validated reports or verified complaints either through phone call, e-mail, fax message, text message, walk-in or mailed complaints. SECTION 8. MODES OF MONITORING, SURVEILLANCE, AND ENFORCEMENT. The team may apply any or a combination of the following modes: 8.1. On the spot Monitoring - conducted by DTI on its own initiative 8.2. Report-Based/Complaint-Based Surveillance - conducted by DTI based on reportcomplaint gathered or received 8.3. Test-buy operation - The team shall, on its own initiative or based on verified teport or complaint, buy samples of local or imported goods or products and submit the same to government-accredited testing laboratories 8.4, Seizure operation - if in the course of the activity, the team chances upon non-conforming local or imported goods or products, these goods or products may be seized, provided that this is done in the presence of a disinterested third party (Le. any barangay official). An Incident Report and Inventory of Goods and Products shall be duly prepared and signed and a copy thereof shall likewise be left at the subject establishment received by the owner or representative. In the conduct of any activity, constitutional and human rights shall be respected. SECTION 9. GENERAL PROCEDURE. Any Monitoring, Surveillance, and Enforcement activity or operation shall be in accordance with the following procedure: 9.1. The Team Leader and members shall take appropriate strategies and steps to be taken to come up with a detailed plan; 9.2. The Team Leader shall brief and give clear instructions to the members before proceeding to the target establishment/s; 9.3. The team shall proceed to the target establishment/s, equipped with the necessary documents and/or paraphernalia, such as a copy of this Order, cameras, identification card; 9.4. Upon arrival at the target establishment/s, the Team Leader shall first look for the owner or representative if the target establishment is a sole proprietorship or, the manager or officer-in charge if it is a corporation or a partnership and shall inform the latter of the team's identities, by showing their respective Identification Cards, Bureau or Office Order stating the purpose of their presence therein; 9.5. The team shall observe and inspect the premises where the normal business activities are being performed, and check on the goods/products and/or the manner the business is being operated CRRTIEIED TaLE narECORY Tun Page 4of7 MA. CARLA YWETTE L. ILARI Head, Records Section Department of Trade & Indu9.6. If based on the observation and inspection made by the team, some goods or products do not conform to what a trade and industry laws or regulations or the Consumer Actirule require, or the business itself does not comply with certain provisions of such laws or regulations, a Notice of Violation shall be prepared to be signed by the Team Leader and have the same received by the owner or representative of the establishment who is of sufficient age and discretion. The Notice of Violation shall be addressed to the owner/manager of a private establishment subject of Monitoring, Surveillance, and Enforcement activity, informing him/her —that__—_—itheir goods/products/services/operation do not comply with certain provisions of a specific trade and industry law or regulations or the Consumer Act of the Philippines and that he has to explain his side by personal appearance and/or submission of written explanation within forty-eight (48) hours from receipt of the Notice of Violation. 9.7. The team shall, in the presence of the owrer or representative of the establishment, make an inventory of non-conforming or non-complying goods. ‘or products. Thereafter, such non-conforming or non-complying goods or products shall be sealed if applicable, and the Team Leader shall decide whether or not to retain the same in the premises of the establishment or be withdrawn therefrom and transferred to a DTI-designated holding area. In any case, a Preliminary Preventive Order or appropriate notice shall be left with the establishment or DTl-designated holding area stating that the total or partial removal, transfer or sale of the goods or products sealed, in any manner shall be strictly prohibited, unless with proper authorization from DTI. 9.8. A written incident report on what transpired during the Monitoring, Surveillance, or Enforcement activity shall be prepared to be signed by the Team Leader and the owner or representative of the establishment, and witnessed by any member of the team. A duplizate copy of the Report shall be left to the owner or representative of the establishment and the original copy shall be submitted to the Director concemed within twenty-four (24) hours from the preparation thereof. 9.9. The Regional or Provincial Director or the technical personnel duly assigned by the Regional or Provincial Director concerned shall conduct a hearing within forty-eight (48) hours from receipt of the Notice of Violation, to determine the merits of the complaint. in case of finding for possible criminal liability, the concerned Regional or Provincial Director, shall make the proper referral of the complaint to the DTI’s Legal Services for the latter's sound discretion whether or not to fle formal criminal charges. In the case of Fair Trade Enforcement Bureau (FTEB), the pre-adjudication hearing shall be conducted by personnel duly designated by the Director. 9.10. The filing of Formal Charge shall be initiated by the FTEB/RO/PO for violations of Trade Laws and Regulations involving distribution, sale, or offer for sale of products and services under Mandatory Product Certification and other Fair Trade and Consumer Laws. Otherwise, if the violation involves Trade Laws and Regulations on importation or manufacture of products and services under Mandatory Product Certification, the filing shall be initiated by the Bureau of Philippine Standards (BPS). CERIO ToUE HHSTAEOPY y Page 5 of 7 MA, CARLA wrt ILARDE Head, Records Section Denartment of Trade & Indu!SECTION 10. ENFORCEMENT PROCEDURE FOR INJURIOUS, DANGEROUS AND UNSAFE GOODS OR PRODUCTS. Whenever the team finds, by their own initiative or by petition of a consumer, that a consumer good or product is injurious, unsafe or dangerous, the following procedure, in addition to those provided in the preceding section, shall apply. 10.1. After making the necessary inventory, all non-conforming or non-complying goods or products shall be pulled out or withdrawn from the premises of the establishment, or if the pull out or withdrawal is not possible, the team shall secure such goods and products by appropriate means to prevent loss, disappearance, or unauthorized withdrawal; 10.2. The Team Leader shall, within twenty four (24) hours or not later than the next working day, recommend in writing the filing of Formal Charge with Prayer for Issuance of Preliminary Mandatory or prohibitory order and/or Criminal Charge against the owner, manager, or duly authorized representative of the subject establishment; 10.3. The Team Leader shall prepare a Report along with a recommendation on what other necessary and proper actions to do under the given circumstances to be submitted to the Director concemed and a copy of which shall be furnished the Regional Director exercising supervision over the said Provincial Director. In the case of FTEB, the recommendation shall be submitted to the personnel designated to conduct the necessary pre- adjudication hearing, copy furnished the supervising Undersecretary 10.4. Based on the aforementioned recommendation which includes the report on the incident, the Head of Office, in the case of FTEB, shall immediately sign and file the necessary Formal Charge and/or Criminal Charge with prayer for issuance of Preliminary Order or Preventive Measure Order (PMO). In the case of Regional and Provincial Offices, the concerned Regional or Provincial Director shall make the proper referral of the complaint to the DTI's Legal Services for the letter’s sound discretion on whether or not to file formal criminal charges. The Regional or Provincial Director or duly assigned tech | personnel from the DTI Regional Office or FTEB adjudication officer shall, after hearing the side of the respondent, exercise his discretion whether ‘or not to issue an appropriate order for the recall or prohibition from public sale or distribution of the subject goods/products. 10.5. A team's recommendation to subject the goods >r products for further testing, ‘once approved, shall mandate the official concerned to direct the testing within twenty-four (24) hours or not later than the next working day from approval. The Director or duly assigned technical personnel from the DTI Regional Office or FTEB designated personne! shall await the result thereof before taking the necessary action on the team's report. 10.6. In case an Order declaring certain products or goods as imminently injurious, dangerous, or unsafe is issued, a Notice shall immediately be published at the expense of the violating person or firm. The Order shall contain a warning that the sale, distribution or use of such goods or products is prohibited and such should be immediately surrendered for disposal in accordance with applicable laws or rules. CERTICED TOUK BUaTAEOPY Page 6 of 7 ‘MA. CARLA LARD} Head, Records Section Denartment of Trade & Indu:SECTION 11. ADMISSION OF VIOLATION. If during the Monitoring, Surveillance, or Enforcement activity, the owner of the goods, products, or business subject of the activity admits the violation, a report to that effect shall be issued by the team to be affirmed by the ‘owner or authorized representative by affixing his signature thereon. In such case, the ‘concerned Director shall dispense with the forty eight (48) hour requirement and shall file the appropriate Formal Charge pursuant to existing DTI Rules. The owner or authorized representative of the business establishment shall be required to submit a sworn undertaking that he shall abide by the decision or order to be rendered as a consequence of his admission. In view thereof, the concerned Adjudication Officer shall issue the necessary Decision or Final Order based on the Report submitted by the Team, the respondent's Undertaking, other pertinent documents attached thereto, and the schedule of fines under exisiting DTI Rules. SECTION12.MOTU PROPRIO. FILING OF —_ADMINISTRATIVE/CRIMINAL CHARGEIACTION. The concerned Director may commence an investigation upon petition or upon letter complaint from any consumer. Provided, that upon finding of a prima facie Violation of a provision or some provisions of any trade and industry laws, including the Consumer Act of the Philippines, DTI, through any of its authorized officers, may motu proprio commence formal administrative or criminal action against any person who appears responsible therefor. SECTION 13, REPEALING CLAUSE. This repeals D.O. 48 s. 2008 and all other D.0.s inconsistent herewith. SECTION 14. EFFECTIVITY. This Order/Guidelines shall take effect immediately. Issued this 1ith day _ of September2018 in Makati City. Recommending Approval: ATTY, ERNESTO V. PEREZ Assistant Secretary, Consumer Protection Group Chairman, TWG on Trainor's Training for Enforcement and Monitoring Approved by: ceaTicco TALK pURTECORE Neots Page 7 of 7 (MA. CARLA YVEPTE L. ILA\ Head, Records Section Denartment of Trade & Indu: