DOE modifying rules on certification of duty-free importation of RE equipment

By Myrna M. Velasco

The Department of Energy (DOE) will be re-casting the set of rules on its issuance of certificates for duty-free importation of equipment, machinery and spare parts that will be utilized for renewable energy (RE) projects in the Philippines.

Department of Energy (DOE) logo Department of Energy (DOE) logo

On its proposed rules modification, the DOE is soliciting industry inputs on a Department Circular that it will be issuing soon relative to RE’s duty-free importation certificates or DFICs.

The DFIC is the document being issued by the energy department granting RE developers exemption from payment of tariff duties on the importation of RE machinery, equipment, materials and spare parts as anchored on Republic Act 9513 or the Renewable Energy Act.

In the propounded DFIC rules’ fortification, the DOE sets out the processes of application as well as the requisite evaluation phase; the sale and disposal of such equipment; and the post-audit requirement.

The DOE rules likewise prescribe “emergency importation”, which may be undertaken by the RE developer upon submission of a written request “showing the necessity of the emergency importation.”

In such circumstance, the DOE stipulated that “the applicant shall post a good and sufficient bond in favor of the Bureau of Customs in an amount not less than the stated amount of duty and tax from which the emergency importation is being expected.”

In case of cancellation of planned emergency importation, the applicant-RE developer will need to inform the BOC of such within a prescribed period of 30 days; and failure to do so will result in the cancellation of its bond.

On securing DFIC, the primary condition set forth by the department is for such machinery and equipment to be “directly and actually needed and will be used exclusively in the RE facilities for transformation into energy and delivery of energy to the point of use.”

The DOE added that “the importation of materials and spare parts shall be restricted only to component materials and parts for the specific machinery and/or equipment authorized to be imported.”

Further, the department noted that “the kind of capital machinery and equipment to be imported must be in accordance with the approved work and financial program of the RE facilities.”

Relative to planned sale or disposal of the capital equipment, the RE developer must secure prior endorsement from the energy department.