PH Strategic Trade Management Act

Department of Trade and Industry
Strategic Trade Management Office
REPUBLIC ACT NO. 10697

Strategic Trade Management Act
Engr. Lorenz Anthony T. Fernando

Trade-Industry Development Specialist
REPUBLIC ACT NO. 10697

Strategic Trade Management Act
An act preventing the

proliferation of weapons of mass
destruction by managing the
trade in strategic goods, the
provision of related service, and
for other purposes.
Serious Security Threats

Terrorist attacks significantly increased across the globe.
Use of WMDs is actualized
Biological and Chemical Weapons are cheaply produced without difficulty.
Serious Security Challenges

UN Security Council 1540
Obligations of all UN member states:

Adopt and enforce effective laws which
prohibit any non-State actor to
manufacture, acquire, possess, develop,
transport, transfer or use WMDs for
terrorist purposes
OUTLINE OF PRESENTATION
I. National Strategic Goods List

II. Scope and Coverage of the STMA
III. NSC-STMCom and STMO
IV. Registration and Authorization
Procedures
V. Penalties and Sanctions
What are Strategic Goods?
Products that, for security reasons or due to

international agreements, are considered to be
of such military importance that their export is
either prohibited altogether or subject to specific
conditions.
Goods that are listed in the National Strategic

Goods List (NSGL) which require authorization
from the Strategic Trade Management Office
(STMO).
National Strategic Goods List
ANNEX I
Military List
ANNEX II
Dual-Use List
ANNEX III
Nationally Controlled Goods
List
What are military goods?
Items, software and technology that are

specifically designed, developed, configured,
adapted, or modified for military end use.
What are dual-use goods?
Items, software and technology, which can be

used for both civil and military end use
or in connection with the development,
production, handling, operation, maintenance,
storage, detection, identification or
dissemination of weapons of mass destruction
or their means of delivery.
Category 1
Special Materials and Related Equipment
Example:
1C350 - Triethanolamine
Civilian use
Cosmetics Shampoo
Military use
Triethanolamine Mustard Gas

Category 2 Materials Processing

Example:
2B001, 2B201 - Machine tools
Civilian use
Oil and gas exploration, Aerospace industry
Military use
Manufacturing of parts and components for

Milling Machine nuclear weapons
Category 3 Electronics
Example:
3A201.a - Capacitors
Civilian use
X-ray Equipment Lithotripters
Capacitor
H
V Switches Detonators
Military use
Stores the energy to be discharged by the switching

Capacitors
device to the detonator of nuclear weapons
Category 7 Navigation and Avionics
Example:
7A001, 7A101 - Accelerometers
Civilian use
Wii, laptops and car airbag deployment
Military use
Accelerometer Guidance system in missiles

Nationally Controlled Goods
Goods placed under unilateral controls for

reasons of national security, foreign
policy, anti-terrorism, crime control
and public safety.
Catch-all Provision
An authorization shall be mandatory for unlisted goods if:
Goods or services are or may be used, partly or entirely

in the acquisition, development, et. al. of WMDs.
Country of destination is subject to an international
sanction or an arms embargo.
Goods may be used as parts or components of military
items listed in the NSGL that have been exported without a
license.
Exporter knows or suspects that the unlisted goods may
be used for any of the uses referred to in para. (a) and (b).

Procedures
Scope of the STMA
Within the territorial jurisdiction of the

Philippines: Any natural or juridical person
who engages or intends to engage in the
activities covered.
Extraterritorial Application: All Filipino

persons providing the activities covered,
wherever located.
Coverage of the STMA
Export Import Transit
Transshipment Re-export Reassignment
Provision of Related Services

(Brokering, Financing, Transportation and Technical Assistance)
Export
Actual shipment of Transmission of software
strategic goods out of and technology either in
the Philippines. electronic/ non-electronic
form.
Import
Shipment of strategic goods or transmission of
software or technology by any means from a
foreign country into the Philippines.
Transit
Shipment of strategic
goods passing through
the Philippine territory
wherein the strategic
goods remain at all
times in or on the
same carrier that is
bound for an ultimate
destination outside the
Philippines.
Transshipment
Shipment of strategic goods passing through the
Philippine territory wherein the good is unloaded
from the carrier and reloaded in the same or
on another carrier that is bound for an ultimate
destination outside the Philippines.
Re-export
Export to a foreign country of strategic goods
previously imported to or exported from the
Philippines.
Reassignment
Reallocation of strategic goods previously exported from
the Philippines from one person to another within a
single foreign country.
Related Services
Brokering, financing, and transporting in relation
to the movement of strategic goods between two (2)
foreign countries and providing technical assistance.
Phased Implementation of the STMA

PHASE 1 PHASE 2 PHASE 3 PHASE 4 PHASE 5 PHASE 6
Registration
Export
Import
Transit/ Transshipment
Re-export/ Reassignment
Related Serv.

Procedures
Central Authority
National Security Council-Strategic

Trade Management Committee
(NSC-STMCom)
A permanent committee under the

National Security Council acting as the
central authority on all matters relating
to strategic trade management.
Composition of the NSC-STMCom
EXECUTIVE SECRETARY
Chairperson
DEPARTMENT OF TRADE AND INDUSTRY

Vice-Chairperson
DFA DOJ DND DILG DOF DOTC DOST DENR DA DOH NSC
ATC-PMC
Secretariat
Powers and Functions of the NSC-STMCom
Formulate strategies, policies and guidelines.

Establish, publish, review and update the NSGL.
Decide appeals on decisions of the STMO.
Establish exemptions from authorization.
Coordinate, assist and cooperate with other

government agencies as well as other nations in
the implementation of the STMA.
Executive and Technical Arm

(STMO)
Bureau, under the administrative supervision

of the Department of Trade and Industry, that
serves as the executive and technical agency
of the national government for the
establishment of the management systems
for the trade in strategic goods.
Powers and Functions of the STMO

Implement strategies, policies and guidelines of NSC-
STMCom.
Establish and maintain a database on strategic goods
and on persons engaged in strategic goods trade.
Issue authorizations or deny applications for
authorizations.
Undertake enforcement of provisions of the Act.
Coordinate, cooperate, provide assistance and share
information with ATC and other agencies.
Coordinate with industry and the public.
STMO Organizational Structure
DIRECTOR
Information and Registration and Compliance and

Communications Authorization Investigation
Division Division Division
Commodity
Information Unit Compliance Unit
Identification Unit
Communications Risk Assessment

Investigation Unit
Unit Unit

Procedures
General Overview of STMOs

Registration and Authorization Procedures
If not:
Issue letter
advising the
applicant that
Are the authorization is
Product Rating/ items not needed.
Registration strategic
Initial ICP Audit goods
or not?
If yes: Issue/ Deny
Authorization/
Application for Issue Further
Authorization Review Notice
Registration Procedure
Documentary requirements
such as:
- Accomplished registration
form. If complete: Enter applicant in
Issuance of
- Description of strategic Review application the Register with
Certificate of
trade relevant commercial for a maximum registration
Registration
activities. period of 30 days number
- Appointment of a senior
manager as the responsible
person for STMA Close down
compliance. If incomplete: application/
process for
- List of natural persons Extend period of
engaged in providing issuance of
review for 30 days Certificate of
services related to strategic
trade. Registration
- Copy of relevant license/
business permits.
Types of Authorizations
INDIVIDUAL GLOBAL GENERAL

given to one natural/ juridical given to a natural/ juridical can be used by any natural/
person person juridical person
with respect to ONE end-user with respect to ONE/ MORE covering LOW-RISK strategic
covering one or more end-users/ exported to/ goods destined to one/ more
strategic goods originating from ONE/ MORE LOW-RISK countries
countries subject to the CONDITIONS
VALIDITY: 2 years covering one/ more strategic specified in the authorization
goods
VALIDITY: Lifetime until
VALIDITY: 5 years revoked or amended
Authorization Procedure
INITIAL CHECKS Requirements
If complete: COMMODITY IDENTIFICATION If not complete:

COMMODITY RETURN WITHOUT
Requires further info.: TECHNICAL
IDENTIFICATION REACHBACK ACTION
End-use determined from info.

RISK ASSESSMENT
submitted: RISK ASSESSMENT
ISSUANCE OF Issuance of Letter of

AUTHORIZATION Intent to Deny
AUTHORIZATION
DECISION If requirements not
satisfied: DENY
APPLICATION
Assessment Criteria
normal product line commodity appropriate for the stated end use consistent with the
for exporter? stated end use? activities of the stated end user?
(Quantity, specifications)
1. known exporter? stated end use makes existence and activities of

significance?
2. compliance program? technical sense? the end user confirmed?
Activities of the
Stated Consignees
Commodity End Use (including stated
Exporter
end user)
stated end use is a direct

1. history of violations? proliferation concern?
2. connections to entities of 1. history of diversion?
concern? 1. reason for control? 2. connections to entities of concern?
3. new exporter? 2. proliferation concern associated with this 3. proliferation concerns or WMD activities
commodity? associated with the end user country?
Appeals
MOTION FOR NSC-STMCom JUDICIAL

DENIAL BY STMO
RECONSIDERATION APPEAL APPEAL
If applicant is
still not
Filed within 15 Filed within 15
satisfied with
Denial of working days workings days
NSC-STMCom
Application by from receipt of from receipt of
decision, it
STMO the decision by the denial of
may appeal
the STMO the MR.
with the SC or
CA.

Procedures
Administrative Penalties
Limitation, revocation or annulment of any

authorization and/or registration;
Fines of up to Php 250,000.00 or twice the value of

the strategic good or related service under the contract,
whichever is higher, or as assessed by the STMO; and,
Cancellation or suspension of the registration and

authorization to operate of the partnership, corporation,
association and other juridical entity.
Criminal Penalties
Imprisonment: 6 years and 1 day to 12 years
Fine: P1,000,000.00 to P5,000,000.00
Engage in any regulated activity without an authorization.

Make false/ misleading representations/ conceal material
facts.
Perform acts in contravention of NSC-STMCom order.
Forge or alter any authorization, registration or certificate.
Obstruct or hinder the NSC-STMCom or any government
agency in the execution of its powers.
Criminal Penalties
Imprisonment: 6 months and 1 day to 6 years

Fine: P100,000.00 to P1,000,000.00
Attempt to commit violations of the STMA.

Fail to report or notify the STMO.
Fail to comply with record keeping requirements.
Engage in any activity with intent to evade the provisions
of the STMA, or any order or regulation issued under the
STMA.
Next Steps/ Status
Approval by the NSC-STMCom of the STMA IRR
Finalization of the NSGL by the NSC-STMCom
Submission and endorsement of the proposed

organizational structure of the STMO
Establishment of IT infrastructure
Thank you for your attention.

PH Strategic Trade Management Act

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PH Strategic Trade Management Act

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Department of Trade and Industry

Strategic Trade Management Office

REPUBLIC ACT NO. 10697

Engr. Lorenz Anthony T. Fernando

REPUBLIC ACT NO. 10697

An act preventing the

Serious Security Threats

Serious Security Challenges

UN Security Council 1540

Obligations of all UN member states:

I. National Strategic Goods List

What are Strategic Goods?

Products that, for security reasons or due to

Goods that are listed in the National Strategic

National Strategic Goods List

What are military goods?

Items, software and technology that are

What are dual-use goods?

Items, software and technology, which can be

Triethanolamine Mustard Gas

Category 2 Materials Processing

Oil and gas exploration, Aerospace industry

Manufacturing of parts and components for

X-ray Equipment Lithotripters

Stores the energy to be discharged by the switching

Category 7 Navigation and Avionics

Wii, laptops and car airbag deployment

Accelerometer Guidance system in missiles

Nationally Controlled Goods

Goods placed under unilateral controls for

Goods or services are or may be used, partly or entirely

I. National Strategic Goods List

Scope of the STMA

Within the territorial jurisdiction of the

Extraterritorial Application: All Filipino

Coverage of the STMA

Export Import Transit

Transshipment Re-export Reassignment

Provision of Related Services

Phased Implementation of the STMA

I. National Strategic Goods List

National Security Council-Strategic

A permanent committee under the

Composition of the NSC-STMCom

DEPARTMENT OF TRADE AND INDUSTRY

Powers and Functions of the NSC-STMCom

Formulate strategies, policies and guidelines.

Coordinate, assist and cooperate with other

Executive and Technical Arm

Strategic Trade Management Office

Bureau, under the administrative supervision

Powers and Functions of the STMO

STMO Organizational Structure

Information and Registration and Compliance and

Communications Risk Assessment

I. National Strategic Goods List

General Overview of STMOs

INDIVIDUAL GLOBAL GENERAL

INITIAL CHECKS Requirements

If complete: COMMODITY IDENTIFICATION If not complete:

End-use determined from info.

ISSUANCE OF Issuance of Letter of

1. known exporter? stated end use makes existence and activities of

stated end use is a direct