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The Department of Trade and Industry-Strategic Trade Management Office has issued its rules on the re-export and reassignment of strategic goods
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STMO Memorandum Circular No. 25-20 was issued and took effect immediately on December 18
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The memo applies to, and automatically covers, all persons or entities that engage or intend to engage in the export of strategic goods that intend to, or have knowledge that the strategic goods covered by the authorization from STMO will ultimately be reassigned or re-exported
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The exporter will not be required to apply for a separate authorization for the re-export or reassignment of strategic goods, provided that the exporter has a valid export authorization covering the same item, end-use, end-user, country of destination, consignee, and third parties
The Department of Trade and Industry-Strategic Trade Management Office (DTI-STMO) has issued its rules on the re-export and reassignment of strategic goods.
The new rules are embodied in STMO Memorandum Circular (MC) No. 25-20, which was issued and took effect immediately on December 18.
The Strategic Trade Management Act (STMA) defines re-export as the export to a foreign country of strategic goods either previously imported to or exported from the Philippines.
Reassignment, on the other hand, refers to the reallocation of strategic goods previously exported from the Philippines from one person to another within a single foreign country by any means, including the electronic transmission of software and technology.
MC No. 25-20 applies to, and automatically covers, all persons or entities that engage or intend to engage in the export of strategic goods that intend to or have knowledge that the strategic goods covered by the authorization from STMO will ultimately be reassigned or re-exported.
The exporter will not be required to apply for a separate authorization for the re-export or reassignment of strategic goods, provided that the exporter has a valid export authorization covering the same item, end-use, end-user, country of destination, consignee, and third parties.
Any covered person who has not yet secured an authorization for the export of strategic goods will be required to apply for an export authorization from the STMO, subject to the requirements and procedure described in DTI MCNo. 25-17, which provides the guidelines on export authorization, and its succeeding amendments.
The re-export/re-transfer/reassignment of strategic goods should be conducted only with prior written authorization from the importing country’s export control authority.
The authorization will be valid for the duration specified therein, unless otherwise revoked, suspended, or annulled by the STMO.
The authorization may be revoked or suspended by the STMO upon a finding that any of the grounds enumerated in the STMA implementing rules and regulations (IRR) exist, notwithstanding the prior issuance of the authorization.
The strategic goods listed in the authorization should be shipped only to the countries of destination and/or specific end-users stated in the license. The strategic goods listed in the authorization should also be used exclusively for the stated end-use and should not be used in the development, production, handling, operation, usage, maintenance, storage, detection, inventory, identification, or proliferation of weapons of mass destruction and their delivery systems.
Under MC 25-20, the authorization holder is subject to an STMO compliance visit and should provide a periodic report, through the electronic licensing system, regarding the usage of the authorization on or before a set deadline, and as requested by the STMO.
Any violation of the provisions of MC 25-20 will be subject to applicable administrative and/ or criminal penalties under the STMA, including other applicable laws, rules, and regulations.
Suspension, return, grounds for annulment, revocation, limitation, or modification of the export authorization are stipulated under Sections 9, 11, 12, and 13 of the STMA IRR.
READ: DTI-STMO issues guidelines for third-party exporters of strategic goods
STMA or Republic Act 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 international agreements, are considered to be of such military importance that their export is either subject to specific conditions or prohibited altogether.
The law covers control of transmission of intangibles such as software and technology.
Under the STMA, traders, transport companies, and logistics service providers moving strategic goods need to be registered and licensed with the STMO.
The authorization allows only a specific transaction, or a series of transactions, as described in the application and any supporting documents.
Under the National Strategic Goods List, there are three annexes: military goods, dual-use goods, and nationally controlled goods.
Military goods refer to goods, software, and technology specifically designed, developed, configured, adapted, or modified for military end-use.
Dual-use goods refer to items, software, and technology which are intended for both civil and military end-use, or are used to develop, produce, handle, operate, maintain, store, detect, identify, or disseminate WMD or their means of delivery.
Nationally controlled goods refer to strategic goods placed under unilateral controls for reasons of national security, foreign policy, antiterrorism, crime control, and public safety.
STMO is an office under the DTI that serves as the executive and technical agency of the government in establishing the management systems for trade in strategic goods pursuant to STMA. STMO is enforcing a phased implementation of the STMA and has started with exports. — Roumina Pablo
