Commissioner of Customs v Eastern Sea Trading.docx

THE COMMISSIONER OF CUSTOMS and THE COLLECTOR OF CUSTOMS, petitioners, vs. EASTERN SEA TRADING, respondent. G.R. No. L-14279 October 31, 1961 Topic: Executive Agreements

NATURE OF THE CASE This is a petition for review of a decision of the Court of Tax Appeals, which reversed a decision of the Commissioner of Customs

FACTS Several onion and garlic shipments imported by respondent consignee from Hongkong and Japan were seized and subjected to forfeiture proceedings for alleged violations of Section 1363 of the Revised Administrative Code. Allegedly, none of the shipments had the certificate required by Central Bank Circulars 44 and 45 (requiring a Central Bank license and a certificate authorizing the importation or release of the subject good ) for their release. The Collector of Customs of Manila rendered judgment declaring the forfeiture of the goods in favor of the Government. Upon appeal, the Commissioner of Customs upheld the Collector’s decision. Respondent filed a petition for review with the Court of Tax Appeals. The CTA reversed the Commissioner’s decision. Hence, this present petition.

ISSUES 1. Whether the seizure and forfeiture of the goods imported from Japan can be justified under EO 328 (which implements an executive agreement extending the effectivity of the Trades and Financial Agreements of the Philippines with Japan) ---YES. 2. Whether the executive agreement sought to be implemented by EO 328 is legal and valid, considering that the Senate has not concurred in the making of said executive agreement ---NO.

RULING Treaties are different from executive agreements. While treaties are formal documents which require ratification by the Senate, executive agreements become binding through executive action without the need of a vote by the Senate or Congress. Further, international agreements involving political issues or changes of national policy and those involving international arrangements of a permanent character usually take the form of treaties; on the other hand, international agreements embodying adjustments of detail carrying out well-established national policies and traditions and those

involving arrangements of a more or less temporary nature usually take the form of executive agreements. The right of the Executive to enter into binding agreements without the necessity of subsequent Congressional approval has been confirmed by long usage. From the earliest days of our history we have entered into executive agreements covering such subjects as commercial and consular relations, most-favored-nation rights, patent rights, trademark and copyright protection, postal and navigation arrangements and the settlement of claims. The validity of these has never been seriously questioned by our courts. Francis Saye, former US High Commissioner to the Philippines, further states that xxx it would seem to be sufficient, in order to show that the trade agreements under the act of 1934 are not anomalous in character, that they are not treaties, and that they have abundant precedent in our history, to refer to certain classes of agreements entered into by the Executive without the approval of the Senate. They cover such subjects as the inspection of vessels, navigation dues, income tax on shipping profits, the admission of civil aircraft, customs matters, and commercial relations generally, international claims, postal matters, the registration of trademarks and copyrights, etcetera. Some of them were concluded not by specific congressional authorization but in conformity with policies declared in acts of Congress with respect to the general subject matter, such as tariff acts; while still others, particularly those with respect of the settlement of claims against foreign governments, were concluded independently of any legislation The Parity Rights Agreement, which was provided for in the Ordinance Appended to the Constitution was the subject of an executive agreement, made without the concurrence of 2/3 of the Senate of the US. Hence, the validity of the executive agreement in question in this case is patent. The authority to issue import licenses was not vested exclusively upon the Import Control Commission or Administration. EO 328 provided for export or import licenses "from the Central Bank of the Philippines or the Import Control Administration" or Commission. Indeed, the latter was created only to perform the task of implementing certain objectives of the Monetary Board and the Central Bank, which otherwise had to be undertaken by these two (2) agencies. Upon the abolition of said Commission, the duty to provide means and ways for the accomplishment of said objectives had merely to be discharged directly by the Monetary Board and the Central Bank, even if the aforementioned Executive Order had been silent thereon. The decision of the CTA is reversed.