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DEPARTMENT OF JUSTICE
OPINION NO. 61
Series of 2002
Secretary Mar Roxas
Department of Trade and Industry
385 Sen. Gil J. Puyat Avenue
Makati City
Sir:
This has reference to your request for opinion on the queries stated
therein relating to the scope of authority and responsibility of the Bureau
of Customs and other government agencies in connection with the promulgation
of Implementing rules and guidelines pursuant to Section 27 and 34 Republic
Act No. 8792, otherwise known as the "Electronic Commerce Act."
Specifically, you inquire whether or not the Bureau of Customs is sufficiently
empowered by the Act to issue rules and regulations that will provide
for import and export procedures that deviate from those laid down in
the Tariff and Customs Code. Further, you ask whether such conferment
of power constitutes a valid delegation of legislative power upon the
government agencies referred to in Section 27.
Section 27 and 34 of the Electronic Commerce Act provide, respectively,
as follows:
"SEC. 27. Government Use of Electronic Data Messages, Electronic Documents
and Electronic Signatures. - Notwithstanding any law to the contrary,
within two (2) years from the date of the effectivity of this Act, all
departments bureaus, offices and agencies of the government, as well
as all government-owned and controlled corporations, that pursuant to
law require or accept the filing of documents, require that documents
be created, or retained and/or submitted, issue permits, licenses or
certificates of registration or approval, or provide for the method
and manner of payment or settlement of fees and other obligations to
the government, shall -
(a) accept the creation, filing or retention of such documents in the
form of electronic documents;
(b) issue permits, licenses, or approval in the form of electronic
data messages or electronic documents;
(c) require and/or accept payments, and issue receipts acknowledging
such payments, through systems using electronic data messages or electronic
documents; and
(d) transact the government business and/or perform governmental functions
using electronic data messages or electronic documents, and for the
purpose, are authorized to adopt and promulgate, after appropriate public
hearing, and with due publication in newspapers of general circulation,
the appropriate rules, regulations, or guidelines, to, among others,
specify -
- the manner and format in which such electronic data messages or
electronic documents shall be filed, created, retained or issued;
- where and when such electronic data messages or electronic documents
have to be signed, the use of an electronic signature, the type of
electronic signature required;
- the format of an electronic data message or electronic document
and the manner the electronic signature shall be affixed to the electronic
data message or electronic document ;
- the control process and procedures as appropriate to ensure adequate
integrity, security and confidentiality of electronic data messages
or electronic documents or records of payments;
- other attributes required of electronic data messages or electronic
documents or payments; and
- the full or limited use of the documents and papers for compliance
with the government requirements; Provided, That this Act shall by
itself mandate any department of the government, organ of state or
statutory corporation to accept or issue any document in the form
of electronic data messages or electronic documents upon the adoption,
promulgation and publication of the appropriate rules, regulations,
or guidelines.
"SEC. 34. Implementing Rules and Regulations. - The DTI (Department
of Trade and Industry), Department of Budget and Management and the
Bangko Sentral ng Pilipinas are hereby empowered to enforce the provisions
of this Act and issue implementing rules and regulations necessary,
in coordination with the Department of Transportation and Communications,
National Telecommunications Commission, National Computer Center, National
Information Technology Council, Commission on Audit, other concerned
agencies and the private sector, to implement this Act within sixty
(60) days after its approval.
(R.A. No. 8792) (stress ours)
Relative thereto, you state that the Information Technology and Electronic
Commerce Council (ITECC), created under E.O. No. 264, is tasked to, among
others, formulate recommendations respecting the promulgation of such
rules and regulations; that the Trade Subcommittee of the ITECC Legal
Cluster is assisting the Bureau of Customs in migrating import and export
procedures have been laid down by the Tariff and Customs Code, the Bureau
has expressed concern that said procedures "cannot be altered by the issuance
of rules and regulations, notwithstanding the repealing clause of the
Act."
While it is your position that the Bureau of Customs can issue the rules
and regulations mentioned in Section 27, as there is sufficient standard
for a valid delegation of legislative power, you, however, seek confirmation
of said position.
Subject to the discussion herein below provided, both issues are resolved
in the affirmative.
A reading of the provisions of R.A. No. 8792, specifically Sections 27
and 34, earlier-quoted, will readily show that while the DTI, DBM and
BSP are mandated to issue the implementing rules and regulations for R.A.
No. 8792, "all departments, bureaus, offices and agencies of the government"
specifically described therein are also authorized "to adopt and promulgate"
"the appropriate rules, regulations, or guidelines" on the use of electronic
data messages or electronic documents in their respective offices. To
authorize means to empower; to give a right to act (Manila Lodge No. 761
vs. Court of Appeals, 73 SCRA 162, 179).
The language of both Sections 27 and 34 is clear and categorical enough
as to require a different conclusion. By express mandate of R.A. 8792,
the administrative bodies mentioned therein have been granted quasi-legislative
power, i.e., the power to adopt rules, regulations or guidelines intended
to carry out the provisions of the law and to implement the legislative
policy enunciated (see Cruz, Phil. Administrative Law, 1996 ed. p. 18).
Although not proceeding directly from the legislative, such regulations
or policies have the same legal force and effect (see Rizal Empire Insurance
Group vs. NLRC, 150 SCRA 566). Moreover, said law, which confers powers
and prescribes procedural requirements, is considered as mandatory imposing
as it does a positive and absolute duty which can be enforced (see Agpalo,
Statutory Construction, 4th [1998] ed., pp 338 and 342, citing cases).
Applied to the case of the Bureau of Customs, a government office under
the Department of Finance, hence, clearly within the ambit of Section
27, the only logical and inevitable conclusion is that the said Bureau
can validly and legally issue the mandated rules, regulations and guidelines
necessary in the use of electronic data messages and/or electronic documents
as specified in R.A. No. 8792, in connection with the performance of its
powers and functions, including those relating to the procedures governing
the entry into and exit from the country of merchandise insofar as these
may be technically feasible given the nature of the transactions involved.
The tenor of Section 27 is evident that what has been delegated was the
power to issue supplementary legislative regulation. A supplementary legislative
regulation is one issued by an administrative body pursuant to a valid
delegation of legislative power which has the binding force and effect
of a law and is intended to fill in the details of the law and to make
explicit what is only general (Cruz, Phil. Administrative Law, 1998 ed.,
pp. 30-31). This is visible from the provision of Section 27 itself which
ordains that the "appropriate rules, regulations, or guidelines" authorized
to be adopted and promulgates shall, among others, specify -
"(1) the manner and format in which such electronic data messages or
electronic documents shall be filed, created, retained or issued;
(2) where and when such electronic date messages or electronic documents
have to be signed, the use of electronic signature, the type of electronic
signature required;
(3) the format of an electronic data message or electronic document and
the manner the electronic signature shall be affixed to the electronic
data message or electronic document;
(4) the control processes and procedures as appropriate to ensure adequate
integrity, security and confidentiality of electronic data messages or
electronic documents or records of payments;
(5) other attributes required of electronic data messages or electronic
documents or payments;
(6) the full or limited use of the documents and papers for compliance
with the government requirements; Provided, That this Act shall by itself
mandate any department of the government, organ of the state or statutory
corporation to accept or issue any document in the form of electronic
data messages or electronic documents upon the adoption, promulgation
and publication of the appropriate rules, regulations, or guidelines."
Not only was the job to be accomplished and the entity to do it clearly
described and identified; the scope of the authority granted was also
specifically determined. Consequently, there can be no question that legislative
power has been validly delegated as the law is complete in itself and
there are sufficient standards to guide the administrative body in filling
up the details necessary for the effective implementation of the law or
provision mandated to be implemented (see Edu vs. Ericta, 481, 497). So
long as the rules and regulations to be adopted conforms to the provisions
to be implemented and germane to the purpose and intent of the law, the
validity or authority granted to and exercised by administrative bodies
cannot be doubted (see also Sec. of Justice Opn. No. 4, s. 1997).
As to the effect of R.A. No. 8792, a general law, upon the provisions
of the Tariff and Customs Code, a special law, insofar as the import-export
procedures laid down by the latter law are concerned, the rule is that
while general and special laws are to be read and construed together,
any repugnancy between them is to be reconciled by constituting the special
law as an exception to the general law (see Commissioner of Internal Revenue
vs. Court of Tax Appeals, 195 SCRA 444). Where the special law is later
enactment, the same will be regarded as a qualification of the general
one; and where the general law is a later law, as in the case, the special
law will be construed as an exception to its terms (Lopez vs. Civil Service
Commission, 195 SCRA 777). The exception is when it clearly appears that
the legislative has intended by the later general act to modify or repeal
the earlier special law (see Agpalo, supra, p. 419, citing case), such
as in this case.
Section 3, 4 and 41 of R.A. No. 8792 and Section 6 (b) and (k) of its
Implementing Rules and Regulations, respectively, read, to wit:
SEC. 3. Objective. - This Act aims to facilitate domestic and international
dealings, transactions, arrangements, agreements, contracts and exchanges
and storage of information through the utilization of electronic, optical
and similar medium, mode, instrumentality and technology to recognize
the authenticity and reliability of electronic data messages or electronic
documents related to such activities and to promote the universal use
of electronic transactions in the government and by the general public.
SEC. 4. Sphere of application. - This Act shall apply to any kind of
electronic data message and electronic document used in the context
of commercial and non-commercial activities to include domestic and
international dealings, transactions, arrangements, agreements, contracts
and exchanges and storage of information.
SEC. 41. Repealing Clause. - All other laws, decrees, rules and regulations
or parts thereof which are inconsistent with the provisions of this
Act are hereby repealed, amended or modified accordingly.
SEC. 6. Definition of terms. - For the purpose of the Act and these
Rules, the following terms are defined, as follows:
(b) "Commercial Activities" shall be given a wide interpretation so
as to cover matters arising from all relationship of a commercial nature,
whether contractual or not. The term shall likewise refer to acts, events,
transactions, or dealings occurring between or among parties including,
but not limited to, factoring, investments, leasing, consulting, insurance,
and all other services, as well as the manufacture, processing, purchase,
sale, supply, distribution or transacting in any manner, or tangible
and intangible property of all kinds such as commodities, goods, merchandise,
financial and banking products, participations, shares of stocks, software,
book, works of art and other intellectual property.
(k) "Non-Commercial Activities" are those not falling under commercial
activities.
The legislative intent for the e-commerce act to supersede the existing
import-export procedures under the Tariff and Customs Code which are inconsistent
with the Act is evident from the above-quoted provisions which clearly
show that the Act applies to al activities, commercial or otherwise, and
to all persons, national and juridical as well as private and government
authority. The extent of the Act's applicability and scope is so all-embracing
such that any doubt must be resolved in favor of its repealing clause
or, at the least, impliedly amending the pertinent but inconsistent provisions
of the Tariff and Customs Code.
In addition, it is worthy to mention that when public hearings on the
Act, then Senate Bill 1902, were conducted, not a single government agency
appeared to have opposed the adoption of electronic commerce. The Bureau
of Customs was even cited to have supported strongly the passage of the
Bill into law. Excerpts from the deliberations of the Senate on the bill
are quoted below:
(April 5, 2000)
Senator Magsaysay. During the extensive public hearings last year which
lasted until June 1999, for about three months, we heard from the government
entities, particularly the Bangko Sentral ng Pilipinas, the COA and
even the BIR. Not even one of them showed any hesitation to embrace
e-commerce because, actually, e-commerce is already being used in ATMs,
the ATMs is part of e-commerce Mr. President.
In effect, even when banks do not wire transfers, that is part of e-commerce.
The agencies that supported strongly the passage of this bill into law
included the BIR and the Bureau of Customs. These are the two most important
agencies as far as revenue generating sources of the national government
are concerned." (emphasis supplied)
Moreover, further reading on the deliberations of the Act reveals that
the drafters thereof in fact anticipated deviation from existing procedures
which are not adaptable for electronic commerce. Portions thereof, insofar
as pertinent, are quoted -hereunder:
(March 27, 2000)
"Senator Guingona. xxx xxx "With due respect to the distinguished sponsor's
dedicated efforts-and I commend him for this- I was wondering if the
gentleman would consider through an enabling act, for the Department
of Trade and Industry to make proactive rules and regulations concerning
this. So that it can make basic laws that will eventually be needed
and make the adjustments that have already been outdated in the UNCITRAL.
We enable, we authorize the DTI to make the necessary basic rules and
regulations.
(April 5, 2000)
Senator Magsaysay. That is correct, Mr. President. We have a provision
in this bill which might help the gentlemen support concern to….
Senator Guingona. What Section?
Senator Magsaysay. This is on page 13, line 13, It says:
Provide, that this act shall by itself mandate any department of ministry
of the government, organ of state or statutory corporation to accept
or issue any document in the form of data messages upon the adoption,
promulgation and publication of the appropriate rules and regulations,
or guidelines.
Senator Magsaysay, Mr. President, concerning the transactions among
government agencies covering page 12 of Section 21, I can see the point
of the distinguished Senator. We will have the time to adjust once the
implementing rules and regulations are put together. All of these, based
on the new law, will allow entities like COA to write their own rules
to allow the use of e-documents as a basis in place of hard copies or
written copies of transactions" (emphasis supplied)
With all of the foregoing in mind, we hold that government agencies,
such as Bureau of Customs, may promulgate rules and regulations to implement
the Electronic Commerce Act that may deviate from their existing rules
and procedures pursuant to, and conformably the standards and guidelines
prescribed in, said law.
Please be guided accordingly.
Very truly yours,
(Original signed)
HERNANDO B. PEREZ
Secretary
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