To avoid future violations, stakeholders, particularly exporters, should start checking if their products are classified as strategic goods needing authorization to export while administrative penalties are still suspended, advises the Strategic Trade Management Office (STMO).
STMO Policy and Enterprise Relations Division (PERD) supervising specialist Justin Herrera said that once the postponement of administrative penalties under the Strategic Trade Management Act (STMA) is lifted “and your shipment is found to be strategic and you have made no effort in registering or applying for license, then that might be a violation.”
Herrera noted that based on the experiences of other countries implementing a similar law, one of the most common violations against STMA is exporting strategic goods without license or authorization.
He warned that even as administrative penalties are suspended, companies found to be violating the law can still face criminal liabilities.
Under the STMA’s implementing rules and regulations, any person found to have committed violations against the STMA will be imposed with administrative penalty, which includes limitation, revocation, or annulment of any authorization and/or registration.
The person will also be fined up to P250,000, or twice the value of the strategic good or related service under the contract, or as assessed by the STMO.
Upon request of the Securities and Exchange Commission, Department of Trade and Industry (DTI), or any other relevant government agencies, STMO can also order the cancellation or suspension of the registration and authorization to operate the partnership, corporation, association, and other juridical entity.
Ways to determine if strategic goods
Herrera, during a recent webinar hosted by PortCalls, said the STMO can assist companies to determine whether their products are classified as strategic goods under the National Strategic Goods List (NSGL).
PERD is also currently sending targeted outreach letters to certain companies whose products might be strategic based on several factors, such as the country of discharge and their Harmonized System codes.
To help companies know whether their products fall under the NSGL, they can also inquire from their counterparts abroad, particularly those in countries already implementing a similar law like the United States and Japan, if their products are considered strategic.
STMA, or Republic Act (RA) No. 10697 (An Act Preventing the Proliferation of Weapons of Mass Destruction [WMD] by Managing the Trade in Strategic Goods, the Provision of Related Service, and for Other Purposes), was signed in 2016 to comply with United Nations (UN) Security Council Resolution No. 1540.
The UN resolution “imposes binding obligations on all states to adopt legislation to prevent the proliferation of nuclear, chemical and biological weapons, and their means of delivery, and establish appropriate domestic controls over related materials to prevent their illicit trafficking.”
Strategic goods are products that, due to security reasons or to international agreements, are considered to be of such military importance that their export is either subject to specific conditions or prohibited altogether. The law also covers the control of transmission of intangibles such as software and technology.
Under the law, traders, transport companies, and logistics service providers moving strategic goods need to be registered and licensed with the STMO.
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