DA Memorandum Notification (19 October 2004)

(NAR) VOL. 15 NOS. 3-4 / OCTOBER - DECEMBER 2004

[ DA MEMORANDUM NOTIFICATION, October 19, 2004 ]

IMPOSITION OF SPECIAL SAFEGUARD DUTY ON IMPORTED ONIONS

The Hon. Commissioner George Jereos Bureau of Customs Manila Through:The Hon. Secretary Juanita D. Amatong Department of Finance Subject: Imposition of Special Safeguard Duty on Imported Onions Dear Commissioner Jereos: Greetings from the Department of Agriculture! Pursuant to Republic Act 8800, the Safeguard Measures Act (Chapter III, Sections 21 and 23), we request the imposition of the appropriate special safeguard (SSG) duty on onion imports (HS Code 0703.1000) over and above the regular customs duty of 50%. The SSG duty to be collected shall be on a shipment by shipment basis. The computation of SSG duty is illustrated in Annex A. This request is being made on the basis of the trigger price of the product (P74.21 per kg., (published August 7, 2002) has been breached or that, the average c.i.f import price of onion from January to June 2004 which is P8.11 per kg. is below the trigger price (Annex B). May we further request that the imposition of the SSG duty be made effective immediately after internal procedures in the Bureau relative to this request have been completed. Thank you and we look forward to your favorable and immediate action on this request. Adopted: 19 Oct. 2004

(SGD.) ARTHUR C. YAP SecretaryAnnex A Determination of the Special Safeguard Duty Based on Price Test (Per Section 24 (b) of Chapter III of RA 8800) This illustrates the method of computing the SSG duty to be applied when the c.i.f. import price falls below the trigger price. The SSG duty to be imposed shall be computed based on the price difference, or the amount obtained after subtracting the c.i.f. import price, as follows: Price Difference (PD), in % of of SSG Duty trigger price (TP) PD < or = 10% 0.00 10< PD < = 40% [30% x [PD - (10% x TP}] [50% x {PD -(40% X TP}] + [30% x {PD 40 < PF < = 60% - (10% X TP}] 60 < PD < = 75% [70% x {PD - (60% X TP}] + [50% x [PD-(40% X TP}] + [30% x {PD -(10% X TP}] PD > 75% [90% x {PD-(75% x TP}] + [70% x {PD60% x TP}] [50% x {PD-(40% x TP}] + 30% x {PD- 10% x TP}] 1. Compute the difference between CIF Price (P) and the Trigger Price (TP) e.g. if current CIF price (P) is equal to P8.11, then TP - P = P74.21 per kg. - P8.11 per kg = P66.10 2. Compute the price difference ratio with respect to the trigger price [(TP - P)/TP] e.g. [(74.21 - 8.11) /74.21] = 89.07% 3. Since the price difference is 89.07% (greater than 75%), the SSG duty shall be computed as follows: e.g. SSG 90% of [(TP-P) - (75% of TP] + Duty = 70% of [(TP-P) - (60% of TP] +50% of [(TP-P) - (40% of TP] + 30% of [TP-P) - (10% of TP] + thus, SSG duty +0.90 [74.21-8.11) - (.75 x 74.21)] + 0.70 [74.21 -8.11) - (.60 x 74.21)] + 0.50 [74.21 -8.11) - (.40 x 74.21)] + 0.30 [(74.21 - 8.11) - (.10 x 74.21)] + = 9.40 + 15.10 + 18.21 + 17.60 = P60.31 Therefore in this example, where c.i.f. import price is P8.11 per kg., the SSG duty which shall be collected over and above the regular customs duty is P60.31. Annex B Volume, Value and Unit Price of Onion Imports 2001 to 2004 Year Volume (in kg.) CIF Value (PhP) Unit Price (PhP) 2001 17,925,108 135,818,139 7.58 2002 6,751, 575 51,879,989 7.68 2003 11,584,228 91,939,692 7.94 Average 12,086,970 93,212,607 7.71 Year 2004 749,640 6,376, 783 8.51 January 194,000 1,583, 493 8.16 February -- - -- March -- -- -- April -- -- -- May 54,000 723,755 13.40 June 501,640 4,069,535 8.11 Source: National Statistics Office