Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

EIGHTEENTH CONGRESS
First Regular Session

House Bill No. 4462

Introduced by Hon. RONNIE L. ONG

EXPLANATORY NOTE

The issue on excessive and questionable destination and other shipping charges,
including container deposits, demurrage and detention charges, has been dragging on
for many years. Time and again, it has impeded Philippine trade and commerce, stifled
competition and transparency, resulted to nationwide inflation and revenue loss to
government and unduly burdened Filipino consumers, port users and businesses. This
perennial issue is also a big challenge to our collective vision fora comfortable and secure
life for all.

Despite being an important national concem and despite our neighboring countries
already issuing regulations on similar problems, the same, however, has not been
squarely addressed by the Philippine government. The cry of consumers, port users and
businesses has fallen on deaf ears despite them strongly pushing for the issuance of a
Joint Administrative Order or an Executive Order in the past. The government inaction
‘can be attributed to the jurisdictional problem- no agency of government is owning up to
the responsibility of addressing the high international shipping costs.

This bill aims to address this glaring gap, stop the blame game and ensure the
welfare of our consumers who have already suffered long enough. This bill mandates the
Maritime Industry Authority (MARINA) to be true to its mandate under Presidential Decree
No. 474 and Executive Orders No. 125 and 125-A, both series of 1987, especially in terms
of determining, fixing and prescribing charges pertinent to the operation of public water
transport utilities, facilities and services except when rates are established by
international bodies and, as included and emphasized in this bill, by free market forces.

Under this bill, MARINA is given various ways to promote fair and transparent
destination and other shipping charges among forwarders and agents of international
shipping lines. The DTI, PCC, BOC and BIR, among others, are also called to assist
MARINA in facilitating competition, commerce and honest revenue collection. The goal is
to protect our consumers once and for all in a fair and transparent manner while also
making sure that operations of international shipping lines and, more importantly,
international trade, will also not be unduly hampered.

In view of the foregoing, immediate approval of this bill is immediately sought.

Party-list


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

EIGHTEENTH CONGRESS
First Regular Session

House Bill No. 4462

Introduced by Hon. RONNIE L. ONG

AN ACT MANDATING THE MARITIME INDUSTRY AUTHORITY TO PROMOTE FAIR
AND TRANSPARENT DESTINATION AND OTHER SHIPPING CHARGES AMONG
FORWARDERS AND AGENTS OF INTERNATIONAL SHIPPING LINES

Be it enacted by the Senate and House of Representatives of the Philippines in Congress
assembled:

Section 1. Short Title. This Act shall be known as the "Fair and Transparent
Destination and Other Shipping Charges Act.”

SEC. 2. Declaration of Policy. It is the policy of the State to promote the general
welfare of its citizens and enhance the competitiveness and development of the Philippine
trade and commerce. The State also recognizes the indispensable role of the private
sector and the need to encourage private enterprise.

Towards this end, the State shall address the high international shipping costs
impeding commerce, resulting to nationwide inflation and unduly burdening Filipino
consumers, port users and businesses, by promoting fare and transparent destination
and other shipping charges among forwarders and agents of international shipping lines.

SEC. 3. Fair and Transparent Destination and Other Shipping Charges. The
Maritime Industry Authority (MARINA) shall supervise the rate-fixing mechanism of
forwarders and agents of international shipping lines and shal! ensure fair and transparent
destination and other shipping charges through the following:

1) Information Portal. MARINA, in coordination with the Department of Trade
and Industry (DTI) and other concerned agencies and stakeholders, shall
establish an information portal as a mechanism for publishing and monitoring
the daily all-in freight charges per route and allowable destination and other
shipping charges, imposed by international shipping lines, their forwarders and
agents, and for disseminating shipping cost information to shippers and
consignees.

For purposes of this Act, MARINA shall not regulate and shall accord due
respect to the imposition by international shipping lines of freight charges as
dictated by free market forces and to negotiations, collections or modes of
transaction between sellers and buyers incorporating the widely-used
International Commercial Terms (INCOTERMS) and any subsequent update
or revision thereto.



2) Allowable Destination and Other Shipping Charges. MARINA shall not
allow the imposition of destination and other shipping charges by forwarders
and agents of international shipping lines not included in freight charges or
freight quotations unless:

a. Covered by a contractual arrangement between the forwarder and agent of
the international shipping line and the shipper or consignee; and

b. MARINA passes upon the reasonability or legitimacy of the said charge
after a public hearing is done where applicant forwarders and agents of
international shipping lines are required to justify the collection of any
destination charge apart from the freight charge and to clarify its nature and
the service rendered in exchange of such charge.

In addition, MARINA may also set a reasonable cap on the charge to be
imposed by forwarders and agents of international shipping lines.

These destination and other shipping charges include fees such as, but not
limited to, Terminal Handling Cost, Emergency Cost Recovery Charge,
Container Imbalance Charge, Bunker Price Adjustment, Foreign Currency
Adjustment, Document Fee, Container Cleaning Fee, etc. or their variations.

3)

Container Deposits. On Container Deposits, which is in the nature of funds
entrusted to forwarders and agents of international shipping lines for
safekeeping to be refunded upon the return of the container, MARINA shall
prohibit the imposition of the same on shippers or consignees who have paid
the necessary container insurance and have given company guarantee for the
return of the containers.

In other cases, MARINA may allow the imposition of Container Deposits, and
set a reasonable cap therefor, only if:

a) the forwarders and agents of international shipping lines implement an
expeditious procedure in refunding the same within a non-extendible period
of fifteen (15) days;

b) there are clear and fair standards for deductions made known by such
forwarders and agents to the other party prior to engagement; and

c) there is actual proof given before any deduction is made.

4) Demurrage and Detention Charges. On Demurrage and Detention Charges,
MARINA shall allow cost recovery by forwarders and agents of shipping lines
based on actual lease cost per day beyond the allowable free time granted by
shipping lines, subject to the following conditions:

a) The accumulated charges shall not exceed the actual value of the container;
and

b) Any demurrage or detention charge shall not constitute a direct or indirect
lien on container deposits or on other cargos or shipments covered by a
separate transaction even with the same shipper or consignee.

5) Education Campaign. MARINA and DTI, in coordination with private
stakeholders, shall develop a program to educate all Philippine shippers and
consignees on how to negotiate using the INCOTERMS, the freight, destination


and other shipping charges imposed by forwarders and agents of international
shipping lines, the best practices to manage or control the supply chain and
updates in the implementation of this Act.

SEC. 4. Assistance of Other Government Agencies. Aside from the assistance
of DTI as mentioned in the preceding Section, the following agencies shall assist MARINA
in promoting fair and transparent destination and other shipping charges and facilitating
competition, commerce and honest revenue collection:

1) The Philippine Competition Commission (PCC) shall continue to investigate
cases of excessive pricing, coercion or payments of any charge under duress
and other possible violations of competition laws and regulations. The PCC
shall also coordinate with MARINA in the implementation of competition
policies in the maritime trade sector.

2) The Bureau of Customs (BOC) and Bureau of Internal Revenue (BIR) shall
study the impact of imposition of destination and other shipping charges to their
revenue collections and shall investigate or determine liabilities arising from
any underdeclaration by or non-payment of any duty or tax due from
international shipping lines and their forwarders and agents.

The BOC shall also study and recommend, for MARINA’s approval, the
possibility of suspending the application of demurrage or detention charges if
international shipping lines, their forwarders and agents fail to provide adequate
container yard space.

In addition, the BOC and MARINA may establish a one-stop shop or satellite
office inside the customs premises, housing all representatives of international
shipping lines, their forwarders and agents, for easier coordination in the
implementation of this Act.

SEC. 5. Penalties. After due notice and hearing, MARINA may impose the
following schedule of administrative fines on any forwarders and agents of international
shipping lines found to have violated this Act:

First offense: Fine of up to five hundred thousand pesos (PhP500,000.00);

Second offense: Fine of not less than five hundred pesos (PhP500,000.00) but
not more than one million pesos (PhP1,000,000.00).

Third offense: Fine of not less than one million pesos (PhP1,000,000.00) but not
more than five million pesos (P5,000,000.00). In addition, MARINA, in coordination
with DTI, shall also cause the cancellation of the accreditation and/or the
blacklisting of the said forwarder, agent or shipping line.

In fixing the amount of the fine, MARINA shall have regard to both the gravity and
the duration of the violation. MARINA shall also have the power to increase the
‘said fines every five (5) years to maintain their real value.

The foregoing liabilities shall be without prejudice to the filing of a criminal, civil or
administrative case pursuant to existing laws, rules and regulations.

SEC. 6. Implementing Rules and Regulations. The MARINA, in coordination
with DTI, BOC, PCC, BIR and other concerned agencies and private stakeholders, shall
formulate the implementing rules and regulations within ninety (90) days after the
effectivity of this Act.


SEC. 7. Suppletory Application. Presidential Decree No. 474, Executive Order
Nos. 125 and 125-A, s. 1987, Republic Act No. 7394 or the Consumer Act of the
Philippines, Republic Act No. 10863 or the Customs Modernization and Tariff Act,
Republic Act No. 10667 or the Philippine Competition Act and all other applicable laws,
rules and regulations shall have suppletory application in cases not provided for under
this Act.

SEC. 8. Separability Clause. If any provision or part hereof is held invalid or
unconstitutional, the remaining provisions not affected thereby shall remain valid and
subsisting.

SEC. 9. Repealing Clause. Any law, presidential decree or issuance, executive
order, letter of instruction, administrative order, rule or regulation contrary to or
inconsistent with the provisions of this Act is hereby repealed, modified or amended

accordingly.

SEC. 10. Effectivity. This Act shall take effect fifteen (15) days after its publication
in the Official Gazette or in any two (2) newspapers of general circulation in the
Philippines.

Approved,