___ April 2009

HER EXCELLENCYTHE PRESIDENT OF THE PHILIPPINES

Malacañan PalaceManilaMadam President:I respectfully write bring to your attention the new, unprecedented,legally baseless and whimsical policy of the Department of Finance (DOF) toassess tariffs and duties on the importation of books, in flat contravention ofhalf a century of Customs policy and practice and in complete violation of ourtreaty obligations as a signatory to the Florence Agreement and the NairobiProtocol. Not to mention every government’s declared policy to encouragereading and spread and deepen literacy in the country.No duties have ever been officially assessed, and paid, on theimportation of books, for whatever purpose, over the last half-century; alaudable and universal practice that was formally recognized by the FlorenceAgreement on the Importation of Educational, Scientific, and CulturalMaterials (copy attached), a multinational treaty, contracted to by more than100 countries, which seeks to further the cause of peace through the freeexchange of ideas and knowledge across national boundaries, primarily bymeans of the elimination of tariffs on “educational, scientific and culturalmaterials”, which is to say books.The Florence Agreement encourages its contracting States to affirmtheir political commitment to favor the free trade and distribution of books,to wit:

“The contracting States undertake not to apply customs and duties and other charges on, or in connection with, the importation of: “(a) Books, publications and documents, listed in Annex A to this Agreement …”

Ever since the Government of the Republic of the Philippines (GRP)ratified the Florence Agreement on 30 August 1952, Philippine Customs haveallowed the duty-free importation of books of the sort listed and describedunder Annex A of the said treaty: that s to say, all books.Unfortunately, one (1) month ago, after one importer inadvertentlypaid customs duties on imported books, the DOF decided that the GRP hasbeen consistently misinterpreting the Florence Agreement, and that for thelast fifty (50) years, has failed to assess a 1% - 5% duty on bookimportations by book traders or individual book-reading citizens of ourRepublic.

In its recently issued guidelines to the Bureau of Customs (BOC), theDOF instructed the BOC to assess a 1% - 5% duty on books and otherprinted materials

if the importer intended to sell or trade the said books,

even if the importer claimed the duty-free privileges under the FlorenceAgreement. Needless to say, in the case of individual citizens, officialdomroutinely makes the assumption our book-reading countrymen are racketeersnot to be trusted, and insists on imposing duties.But in the case of booksellers, why else would books be imported ifnot to be sold? The Republic of the Philippines adopted this view and, overhalf a century, made it law. And if in the past booksellers were not penalizedfor the temerity of thinking they could sell books, why are ordinary citizensbeing treated as potential criminals intent on peddling their books to others?The DOF, however, has adopted the position that imported bookswhich were to be sold and traded were not entitled to the duty-free privilegesgranted by the Florence Agreement and the Nairobi Protocol. Thisinterpretation is, as we argued with DOF at the time it attemptedconsultations with Congress, without basis either in fact or law, and floutshalf a century of established Customs policy and practice.The DOF said that half a century of policy and practice must yield tothe eureka moment of its legal department when, in a flash of inspiration –really, imagination bordering on delusion- it devised a scheme in which allbooks imported for sale should be taxed. Neither

estoppel

nor prescription,said the DOF, can run against the State, citing no authority on the matterbecause, in law, both can run against the State. What the DOF really meantto invoke is the outdated not to say obnoxious principle that the State, likethe King, can do no wrong.Madam President, the DOF is legally wrong. The law is what aninternational treaty solemnly ratified by our Republic and further confirmedby half a century of tax free importation of books has made it. I offered tointroduce legislation imposing a tax on books if that is the DOF’s pleasure butit cannot, on its own authority, wake up one morning and say that half acentury of state policy and practice are wrong. The DOF said there was noneed for a law, as its interpretation is now the law. It is not. An internationaltreaty, in this case, says what is law and its legal enforcement over half acentury underscores the treaty’s true meaning.Nowhere in the Florence Agreement does it state or even imply thatthe book or printed matter should not be for sale for it to be duty-free.Indeed, the only requirement for duty-free treatment is that the book orprinted matter is listed or described in Annex A of the treaty. And so it hasbeen, in Philippine practice and policy for half a century.Indeed, none of the contracting States to the Florence Agreementimposed qualifications like the proposal of the DOF that the books importedshould not be for sale or trade, in order for imported books to be duty-free. Ifimported books were not for resale they would be personal effects and duty-free by definition.

The treaty’s goal is not merely to promote the charitable distributionof books or to simply allow individuals who had purchased books abroad to beable to bring them home duty-free, as the DOF insists. Rather, the purpose ofthe Florence Agreement is to spread knowledge and ideas across nationalboundaries through books to as many people as possible, which is to sayprincipally by trade and commerce in line with the market philosophy of theFree World since the end of World War II.Despite uninterrupted practice and a consistent history ofimplementation of the spirit of the agreement, the DOF now insists that theGRP, over the past half a century, has been negligent or inept for failing toimpose duties on books in violation of its treaty obligations.Other than the DOF’s whimsical and wrong interpretation of theFlorence Agreement, the DOF in its guidelines also usurped the powers of theNational Book Development Board (NBDB), an agency created under RepublicAct No. 8047, with regard to setting our national book policy. The DOF gaveitself the authority and expertise to define what an “educational, technical,historical, professional, and cultural book” is. And it has chosen to interpretthe largest volume of books to be taxable. In short, the DOF has arrogatedunto itself the nonexistent, that is, unconstitutional, power to regulate if notcensor books by theme and content—a power that exists nowhere in thestructure of our government.After much discussion with DOF officials, I attended a meeting lastmonth with your Secretary, Margarito B. Teves, his Undersecretary Estela V.Sales, and NBDB Executive Director Atty. Andrea Pasion-Flores, along withmost of the major players in the book industry, to resolve this problem. Thearguments above, among others, were relayed to the DOF team present inthe meeting. Despite this, the DOF issued the guidelines imposing a 1% - 5%duty on book importations by book traders and, indeed, by all book-readingcitizens.Hence, I now come before you to seek your intervention. We haveexhausted all administrative remedies. Despite their patent inability to answerour arguments, the DOF panel has insisted on having its way. Its lastargument was that it has marching orders from you to raise revenues by anymeans necessary. We assume this order excluded illegal measures and thosethat contradict national policy and international treaty obligations.Let me say in the most categorical terms that imposing a duty of 1% -5% on book importations by our book traders and our book-readingcountrymen will not only make books less accessible and affordable to theFilipino people as a whole, but will expose our government to criticism andoutright ridicule, not to mention sparking formal protests from the civilizedmembers of the international community who are all signatories to theFlorence Agreement, thereby embarrassing your administration.With a stroke of a pen, the DOF replaced our status as aninternationally acknowledged frontrunner in having a national book policyconsistent with the Florence Agreement and the Nairobi Protocol with the