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Republic of the Philippines Iiead OIIice:

Department of Finance P. O. Box 3589 Manila
INSURANCE COMMISSION FAXNo.522-14-34
107 I United Nations Avenue Tel. Nos. 523-84.61 to 70
Manila E-mail : oic@i-manila.com.ph

24 August 2001
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CIRCULAR LETTER fio. I1@1

To .: AllInsurance Comparies,{R'einsurancp Brokers Licensed
To Do Business in the Philippines

SUBJECT : Documents Required of Insurance Companies/Reinsuranee Brokers to

Accompany Requests for the Certifications to be issued by the
Insurance Commission relative to Foreign Exchange Applications for
Remifiance ofNet Profits, R*insurance Premia and Payment of Loss
Clairirso:

In connectioil with the Circular Letter- Series of 2001 to all Authorized Agent
Banks (AABs) and Their Subsidiary/Affiliate Forex Corporations, dated August 9,
2001, of the Bangko Senffal ng Pilipinas, superseding MAAB, dated June 27, 1980, all
insurance.companies/reinsurance brokers are hereby advised that the following
documents should accompany requests for the certifications stated in the said AABs :

I - Net Prolits of branches offoreign duthorized insurance

companies -

L Swom statement of the authotized officer ofthe applicutt

compa$y attesting that the rei'niffance shall be from net
profits to be remaining bn hand after retaining uriimpaired the
following requirements ofthe Insurance Code :

r) The statutory deposit

b) The mmgin of solvency and
c] The legal resenre firnd

and a sum suflicient to pay atl net losses reported or in the course
of settlement and all liabilities for expenses and taxes.

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;, Copy ofthe latest ardited finanbial statement ofthe applicant.

tr Reinsurance Premia - ,

l. Copy. of the statembnt ofheinsurance Account prepared by

the applicant.

1 Parti culars of the be atylfac ultative placement covering the

remittance.

3. Nbtice of demand and/oi-statement ofreinsurance premium

due given or prepared by the beneficiary.

4. Sworn statement of aresponsible official ofthe applicant

cErti$ihg that it has withheld th6 required taxes in
urroidanm dvith the Internal Revenue rules and regulaiions.
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5. A written authorization to remit premia issued by the ceding

insurance compary in favor of a resident reinsurance broker,
in case the latter is applying for or in hehalf of said coinpany

6. Copy ofthe insurance policy inba5e of facultative placements.

m - Payment of Clairns for Losses -

1. Copy of the Irotice 9f demand or statement of account'

2. Particulbrs' of the ieatyffacrltative placement.
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3. Copy of the marine hull/caigo policy and survey report

in case of marine losn claims-.
,
ru - For all other cases of insdrance and/or reinsurance payments '
All pertinent documents to establish the legitimacy/accuracy ofthe
amount sgught to be remitted.

In any of the above caser, the follor*'ing should likewiee be submifred :

l. Copy of the appropriate CBP application form for the purihase of

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foreign exclange, duly accomplished and notarized.

?. copy ofihe certificatio, or* independant certified publi, accountant

.. in accordance with circular LettLr dated ribruary 10, 1975 of this
Commission.

A copy of the Bangko Senhal ng Pilipinas Circular Letter- Series of 2001 to

All Authorized Agent 'Banks" (AABs) and itreir Subsidiary/Afliliate Forex
cbrporations dated August 9, 2001, is attached for ready reference.

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1 Insurance Commissioner

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Bangko Sentral ng Piiipinas

MAYNILA, PITIPINAS

oFTrcE oF TErEnmur,v corrynnibn

slrpguttirs tonq anm ExANm{ATIC}H sECToR

CIRCUI-{R- mrrm.
SffiIES of 2001

TO : AtL AtlTi{ORIZmAGH\iT BAIi{-IG (AABE} AI{DTIfiIR

SIJBS IDIART]/AFTILIATE FDREX CORPORATIOI\ffi

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^+*-^U^; rur "^..-!uljr SUrLkl,tlLt?.tA ^f Iiiiiiiiiiuiit
iin.ii. Lij. -;-;-..- iiUUiiiittrIiti:Urc
re quireme ntr that AABE" *#o, forex c orporati ons
the ir. sub si di ary/affi I i af e
shall require from'residEnts purchasing foreign exchange for non-hade
purToEec. r

This Circular-Letter seryes to clanfy Sestion 2 of CifeularNo. 1389

s, 1995, a-q amended.

ALBERTOV. RE'TES
Deputy Governor

'August 9. 2001
 DOCUMENTATION REQUIREMEIiTS FOR_ THE SAIE OF FX FOR
N{-i}.I-TRAD E P [iRP T} SEiJ

PIIPJO*(E -uocrrnmlrys ng+ruREu

1) Travel Frurds (Only for permanent 1. Applieant's paxErort
residents of the Philippinesi 2, Passenger ticket

ti Educational Expensee/Student 1.,gtaternsnt of emsllm*nt or

Maintenanee aeceptance by the scirool
alroad shorving that the
student is rt'orking sr atlaut
to work for a degree or taking a
technology course;
1 Rl-lrnnl lrillo/gtat+nn+*f< nf n**+rrnt
covering tuition and other school
fees; and
3. Sworn statement of the studerii
that he does net enjoy ncholarship/
g'aniife I I ewshipristipr end atdior i s
not gainfully e mployed.

3) Corresponclence Studies 1. Proof of admission or enrollment

AABs ma_y sell foreign in correspondence. school;
+xchange to cover iuitirn t. Descripiian rf curriculum cours*s
fees for correspondence 3. Statement of iles, duee or total
studies rvhich shall he r co*t ofthe couree; and
direcily remiited to the 4. Schedule of paymenilbillings
correspondence school. from the school ahroad.
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4) Ivledical Expens*-E l. C*rtificatior fi'om a locsl doctor

eertiS'ing the need for the
patient to *nrl+rgo m+di+al
treatrnent atrroasl and the non-
availabilif af sueh h'eatmeni
" locally; and
2. Estima.te of cost of medical/
hospital treatment abroad/state-
ment of account wittr the
hos.pital,tbills of e4penses.
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5) Support ofDependents
Abroad
AABs may sell foreign exchange
covering the monthll, livin_t
allor+'atee abroad of a ehild uoi
more than 2l yems of age, ,EFouEe
or parent of aPhilippine resident,
6) Emigrants'assets
1. Consular certifieafe or its
*-quivalent documsnts ta
FrDvE that the dependent
is residing abroad and is
not gaint'ully employed
in the counky of
residense abroarl;
2. {-lertiijed true cepy of hirth
certificate" marriage confu'acl
adaption papet's, r+,hichev+r is
applicatrle, to prove that
dependent is the wife"husband
child ar parent of the remitter
' applicant; and
3. Proof that remitt+r is a resirlent
ofthe Philippines.
!.. Preaf efpernnanent residence
of emisrurtibeneticiarl,
abraadl
2. Proof of ownership ofthe
assetis by emi granttbenefi c-
iary abroad;
3. Fayment of applicahle taxes;
4. In case of income ltom real
propertien" a stetement af
rentals/income earned, certi-
fied by an independent CIA;
_5. In ease oftranstEr ofproceeds
of capital assets. the AABs
nhall aelditionalll'- require.
a. copy ofdeed ofsale
b. If the subject ofthe sale is
real *state, pl'oaf ihat the
kansaction rvas registered
with the Regirter ofDeeds;
6, In case of capital transfer of
testale and intestate inherit-
ance anrl legacies;
a- copy ofcourt order
approving the partition
anr,{ dish-ibuiian of entate;
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b. copy of the exhqjudicial
settleni*ut atd putition
dulv registered rvith
Register of Deeds,

7. For hansfsr ofproceeds of

life insurance benetits, proof
ofpayment of the proceeds
ofthe policy;

8. For rernittance ofproceeds

of sales ofp*rsonal pro-
perty, copy ofdeed ofsale;

9. In case ofhansfer ofpro-

ceeds ofsale ofshares of
gt*ck. A.r-Bs shall n!s*
require:
a. i-1oF-v afthe csnfirm-
ation af rale af auth-
orized necurities dealer/
broker ot the issuinq
corporation:
b. Certification of stock
transfbr agent s horr"ing
the name of the issuing
corporatiori,date of
issuing pm value, cout
of acquisition, and that
the shares of ntock
ovrned by the bene{i-
eiary have been sold
at the price indieaied_

10. In case ofretirement

benefrts, AABs shall, in
addition to Items I to 4,
also require:
a. Evidence ofpayment
of retirement h,enefitn;
fr. It-ihe remittance will
be done in five (5)
years or over alter
receipt ofthe retire-
ment pay. evidence
regarding custodl, of
the firnds.
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7) Salary'offoreign 1. Certification of employer
*4pah'iates on the amount of compe-
nstriicfl paid to th* f*reign
naiionais ntating whether
the sarne had been paid
in foreign exchange or in
pes*c, and if in foreign
exchange, pr.oof that the
foreign exchange was
nslil for FBE+F ta AAEs;
1. Copy ofthe witholding
ta-:r receiPts unless
*xeurpt by lauq
3, Photoeopy of the ACR
and M0LE Alien
Employment Permit of
the foreign national.

L Producers'Share/TV 1. Statement ofremittable

Film Rentals shme rental certified
The producers' or hy an independent tlPA;
f,oreign licensore' 2. Proofofpavurent of
contractual shffre which witholding tax.
shall not exceed 609/o of
the net proceeds less local
di stritruti on erpenses. from
the distibutioru'exhibition
of zuch films imported
without foreign exchange
payrnenLr, may be remiiied
in full, net of ta.x+s. T1.r
tilm rentale rlay als* be
remitted in full based an
raten stipulated in the
individual conhacts
or agreements.

9. Commissions on Exports due Agency agreement

Fareign Age*ts Exp+rt Declaratian ar
Export Permit
J. Export Bills of lading
and ftrvoices
4. Statement ofAccount/
Invoiees
5. Computation showing
how the amount
sought to be remitted
was an'ived aI; and

10) Freight Chariges ou Exports
Phil. elporters may buy foreign
exchange from AABs ta pay
for freight charges due shipping
companies, whether foreign or
Filipino-orvned, on export shipments.
11) Advertisitg Casts
l2) Subscriptions
13) Charters and Leaseu
. of Vessels Domestic operators
sr lessees of foreign-owned
vessels may remit foreign
exchange for charter fees or
l*ase rcttals.
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6. Certification from
recei'"'ing bartk coucer-
ned indicating th*
amount of export pro-
ceeds *'hich have been
sold for FEECIB.
1. Freight conkact. If no
formal confuact of
affreightment has been
executed, a duly noted
freight bilUstatement
of account may be
presented;
2. Export declaration;
3. Sdes invoice;
4. Bill oflading
5. Bills/Statements of
account on fr+ight
charges.
1. Copy af advertising
aEreementl and
?. Original statement
of accounts or trills
or invoices,
3. Clippings ofappro.
riate page ofpubli-
cations or the adver-
tisement.
1
1. Subscription a.gree-
ment
I
2. Statement of accoilnt
I
or bills
1. Cliarter or Lease
I
conkact ruithout option
lr to purchase
2. BillingsiStatement of
account from the owner
or lessor duly certi{ied
by an itdependent CPA
3. Proofofpayment of
withohling ta:i
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14) Mernlrership dues alrd 1. Pro+fafm*mbership

regish'ation f+es
Remittanee to be made directly
io the asrosif,tir,:nr atroad
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15) Port Disbursemeilts
Port disbursements abroad
sf aircrafts and vesnels of
Phil. Regisky or charieredi
leased by domestic operators
for fuel, sliips's stores snd
similar suppli es, harbor/air
fiekl feer.tonflage, repair anrl
maintenance
iir the f*r+ign or inter-
national association.
l Eillings fcr m+n-rtier-
rhip dues/regiskation fees
1. Copy of conh.act or
agreement;
2. Duly certilied tru+ copy
of statement of accounts/
bill#invoices (va.ified
against original copy)

16) Mail fees/ International settlement 1. Copy ofconkact or sgree-

of accounts for telegraph, telegram, ment whenever applicable
radio, saiellite and other communi- 2. Duly certilied statements
cation facilitiee of accounts/bi I I n,invoicen

l;'i Sulvage fhe* i. ilt:p5,'$f cilti'ri=aet f$r

salvage semicEs
2. Ihrly eertified siatement
of accounts./bi I lsiinvo i ces
3. Proofofpayment of
applicable ta':es

18i Income taxes due ia Fareign Gor.ern- 1. Certified kue capy of

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rutlttiJ
[.{#LE-appraved con-
Income taxes due to tbreign Gcvem- bact of emprloyrnent;
mert fi'om foreippr riationals wifh 2. Certifi+d true eopry of
special ternporary visa and h{0LE Incorne tax return cover-
employment permit, ifrequired by ing the Income tax pay-
Iax', *'ho are employed in thp phil- rnent
ippines and whose entire compen- "eought to be
remitted.
sati on (salar1,, allowances, bouuses
and other fringe benefitr) is paid
for in foreign exchange Inward-
remitted into the philippines.

I 9) Sen ices.llieenseJConsultancv 1. Copy ofpertinent

Feex,&Ianagement Fepe agreement-
Foreign exchange pa.-l'mente for 2. Statementr(lomputation
ma*agem *n#senri *el*+nsultancy of tles due; and
coniracts ruith tbreign tjrms or 3. Proof ofpayment of
individuals or residents not involving sJrplieabl e ruitholding
technology tranrfer may be sen iced ta:res on feer to be
byAABs. remitted.
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20) Retainers' fees 1. Copy ofthe agreement;
Forei.gn exchange payments by and
resi defl ts ta foreign protlssional s 2. BillingsrTnvoices fi'oilr
acting as liason, counsel. agent on the henefieiarv
representative-abrnad may tre
Sen'iced by AAB

2 1.i Reiffitu atce prerniunu'ciainrs ior i. Original copli of certitiea-

losser and other payments of tion fom the Insurance
insurance campani en/trrokers (-lsmm isni onsr stating
among othern, that the
amount is due urel pay-
able to the beneficiary.
2. trn case ofremittance of
payment of claims for
losses, AABs shall also
require copy ofReport
ofDamage on Survey
Report rendered by an
adjustor on Marine
Surreyor and a copy
of tlre Notice of Dernand
for Paynrent ofLoss.
both verifipd by OIC.

22) Freight Charges on Imports L Certified copy ofBill

of Lading and Freight
Invoiee
2. Certified copy of LCl
Sales Confirmation if
shipment is without LC

23'!Net Passenger Revenues of t

t
l.Copy ofthe Gene.ral
Foreign Airlines I,i Sales Ag+ncy Agreement
Foreign airlines authorized to 1
or certified copy ofthe
;
do husiness in the Philippines I Bilateral Air,{gree-
.l
rnay remit abroad their peso ments;
revenues, net of commissions 2. Statement ofReceipts
I
paid,pesa commissions earnad, and Disbursements for
commissions earned and ticket the period correred by
sales in foreign exchange.
.the remittance, duly
Agency commissions shall be certified by an iudepe-
paid in the currencv irr dent CPA;
whieh ihe tickeis are sold. 3, Proof ofpayment trfthe
corresponding taxes;

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4. Statement of gross
Philippine billing
con*upandi*g to the
period covered by the
remittance; and
5. List of non-rcxident
passengers who paid
their tickets in pesos, if
any, and lirt of pass-
engpr tickets refunded.

?4 ) Freiglrt Callectioru or.Shipping l_ Copy of AgeneSr

Companies
.{greenrents;
Shipping agents may rernit to
?. Statement ofRevenues
their principals abroad freight
and E4penses duly
collections in pesos. net ofagency
- certified by an indepen-
f+es, eourfirissions enrt ilist,urse-
dent t-lPA;
ments made in behalf of the
3. Proofofpavments of
principals;
corresponding tmes
4. Detailed statement of
freight receipts indica-
ting natr* ofpnvorr.
bills of, lading. official
receipts, data and
amount ofpayment.

35) Transfer ofsavings of expahiates

Transfer of savings of e4pahiate
employee may be allowed in ftll,
net ofiaxes, lvhen ihe +onhact of
employment has been concluded
ar flre employee has treer tsanstb-tred
to ather oflices abroad
l. Contract of employment;
2. Certification of the
employer that the con-
baci has been terminaied
or concluded;
3. Staternent of salaries paid
r
dru"ing the validig afilre
conkact of employment;
4. Transcript ofbank
deposit account perti{ied
by the bank afticial. If
ihe amount to be remii-
ted comes fom new
deposits {less than one
year p lacement), inform-
ation regarding the
sourceg oft-unds,
supported by appropriate
documents;
, 5. Proofofpayment of
Income taxes.

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26i Royalties/Fees 1. Statement/computation
ofthe Ravalty/fee duly
certifi ed by independent
CPA
?. Proofofpayment of
witholding taxes
3. Regirtrati onr(-lertifi cate
of f-lompliance issued by
Do eum * ntati on lrrforma-
tion Technology
Transfer.