1. CONSULTATIVE MEETING April 6, 2016 @ 9:00 AM AVR, Penthouse, BOI Makati City

2. IMPLEMENTING RULES AND REGULATIONS ON CONTROLLED CHEMICALS PURSUANT TO SECTION 4-C TO 4-F OF PD NO. 1866 AS AMENDED BY RA NO. 9516 I – TITLE

3. II – BACKGROUNDER CURRENTIRR 1.Controlled chemicals exclusively refers to the family of chlorates, nitrates, nitric acid and such other chemicals and accessories that can be used for the manufacture of explosives and explosive ingredients. 1. Categorization of Chemicals a. High Risk Controlled Chemicals b. Low Risk Controlled Chemicals 2. Types of Licenses a.License to Possess Controlled Chemicals (Manufacturer) b.License to Possess Controlled Chemicals (Dealer) c.License to Possess Controlled Chemicals (Purchaser) 2. Types of Licenses a.Manufacturer’s License b.Dealer’s License c.Purchaser’s License

4. CURRENTIRR 3. Scope of Licenses a.License to Possess Controlled Chemicals (Manufacturer) - Authority to manufacture, import and export b.License to Possess Controlled Chemicals (Dealer) - Authority to import, export, deal in or sell and purchase. c.License to Possess Controlled Chemicals (Purchaser) - Authority to purchase 3. Scope of Licenses a.Manufacturer’s License - Authority to manufacture, import, export, deal in or sell and purchase b.Dealer’s License - Authority to import, export, deal in or sell, purchase and to sell to unlicensed but DTI-certified micro and small enterprises, academe, analytical laboratories and hospitals at a minimum quantity. c.Purchaser’s License - Authority to purchase, use and process controlled chemicals to produce its desired product and subcontract the manufacturing. II – BACKGROUNDER

5. CURRENTIRR 4. Process Flow, Total Activity Time and Documentary Requirements (Licenses and Permits) ** 4. Process Flow, Total Activity Time and Documentary Requirements (Licenses and Permits) 5. Sale, Movement and Transfer of Controlled Chemicals - with corresponding PNP Escorts 5. Sale, Movement and Transfer of Controlled Chemicals - Instead of PNP escort, PNP will accredit logistics service provider/forwarder/trucks. II – BACKGROUNDER

6. III – SALIENT FEATURES Section 3. Categorization of Controlled Chemicals:  PNP Controlled Chemicals are categorized into High Risk and Low Risk.High Risk Low Risk.  For reason of public order and safety, the Chief, PNP may update the list or regulate unlisted chemicals to take effect immediately but with due regard to affected chemicals in transit or in circulation. The Chief, PNP shall submit the updated list within 15 working days for validation in consultation with the R&D Team. Section 4. License to Manufacture, Deal and Purchase Controlled Chemicals.  Extension of validity of licenses pending approval of applications for renewal.  Graduated penalties.  Issuance of Certificate of Good Standing * * *

7. III – SALIENT FEATURES Section 5. Scope of License to Manufacture, Deal in and Purchase Controlled Chemicals  Manufacturer is authorized to deal in or sell all manufactured items.  Dealer may sell controlled chemicals even to unlicensed but DTI- certified micro and small enterprises, academe, DOST certified analytical laboratories and hospitals at a minimum quantity.  Purchaser can now subcontract.  For initial importation, application to import may be filed for such quantities as may be needed by the licensee for one year period based on the storage capacity multiplied by 12 months plus 25%.  For the succeeding importation, application to import may be filed for such quantities as may be needed by the licensee for one year period based on the maximum annual average for the past three years plus 25%.

8. III – SALIENT FEATURES Section 7. Registration and Accreditation of for PNP Accredited Logistics Service Provider/ Forwarder/ Trucker Controlled Chemicals  Enlistment of the services of Logistic Service Provider/Forwarder/ Trucker in lieu of PNP escorts in every movement. Section 8. Record of Transactions, Inventory and Inspection.  Submission of reports, especially consumption reports with delivery receipts, shall be on the 15 th day of the following month.  Inspections of storage facilities shall be done only during office hours and Inspection Checklist indicating the findings will be outrightly issued to the company.

9. III – SALIENT FEATURES Section 11. Cancellation of License.  Imposition of penalties for failure to maintain records in lieu of outright cancellation of license.  Reason for Cancellation of License a.Possession, importation, manufacture or selling of controlled chemicals not covered in the approved license; b.Selling or transfer of controlled chemicals to unlicensed person or entity unless otherwise exempted; c.Purchase of controlled chemical from unlicensed person or entity; d.Use of unaccredited logistic service provider/forwarder/trucker in the movement and transportation of controlled chemicals; e.Disposal of unused, contaminated and expired controlled chemicals without the appropriate permit; and f.Submission of falsified document in the application of license and/or permits.

10. III – SALIENT FEATURES Section 12. Penalties.  The criminal penalties as provided under Sections 3-A, 3-B, 3-C, 3- D, 4, 4-A of RA No. 9516 shall be applicable. Section 13. Authority of the Chief of the Philippine National Police (PNP) to Issue Policies and Guidelines.  The Chief, PNP may revise this IRR and its Annexes in consultation with the concerned sectors of society and with approval of the Secretary of the Department of Interior and Local Government to be published in the Official Gazette or in a newspaper of general circulation and to be submitted to the UP Law Center.  The Chief, PNP through the Director, CSG may also issue relevant policies and guidelines in accordance with the law and this IRR for its effective implementation and submission to the UP Law Center and to be fully circulated.

11. III – SALIENT FEATURES Section 14. Application of Information and Communication Technology. The PNP shall develop and utilize information and communications technology to enhance regulation and to support a cost-effective and efficient operation.

13. PNP LICENSES AND PERMITS (REQUIREMENTS AND ACTIVITY TIME) APPROVING AUTHORITY LICENSES & PERMITS REQUIREMENTS PROCESS FLOW (ACTIVITY TIME) CURRENTPROPOSED CURRENT PROPOSED (MANUALLY) PROPOSED (AUTOMATION) I – CPNP 1.NEW MANUFACTURER’S LICENSE * * 2.NEW DEALER’S LICENSE 3.PERMIT TO IMPORT (M & D) * * 4.PERMIT TO EXPORT (M & D) ** 13 6 4 11 3NGS-2GS 3NGS-3GS 24D-16S** 24D-16S 20D-5S 10D-5S II – DCSG 1.NEW PURCHASER’S LICENSE ** 2. AMENDMENT ** a. MANUFACTURER’S LICENSE b. DEALER’S LICENSE c. PURCHASER’S LICENSE 3. PERMIT TO IMPORT (P) ** 4. PERMIT TO EXPORT (P) ** 13 10 6 4 11 8 3NGS-2GS 14D-4S** 14D-4S 10D-3S 5D-3S III – CFEO1.RENEWAL ** a.MANUFACTURER’S LICENSE b.DEALER’S LICENSE c.PURCHASER’S LICENSE 2.PERMIT TO PURCHASE & MOVE 3.PERMIT TO UNLOAD *MOVE* 4.SPECIAL PERMIT TO PURCHASE & MOVE ** 666777666777 5NGS-2GS 4NGS-3GS 6 10D-4S** 10D-4S 5D-3S 3D-3S BACK

14. Applicant must have all the qualifications and none of the disqualifications. 1.Maintained a permanent and complete record of all transactions from the inception of its license; 2.Submitted complete and correct reports on a monthly basis; 3.Prompt renewal of license for at least two years starting from the approval of the IRR on Controlled Chemicals; 4.No derogatory report/s such as but not limited to the following: a.Possession, importation, manufacture or selling of controlled chemicals not covered in the approved license; b.Selling or transfer of controlled chemicals to unlicensed person or entity; c.Purchase of controlled chemical from unlicensed person or entity; d.Movement and transportation of controlled chemicals without appropriate permit; and e.Use of unregistered and unaccredited forwarders in the movement and transportation of controlled chemicals. 5. Endorsement from other government regulatory or investment promotion agencies. Parameters for Issuance of Certificate of Good Standing BACK

15. a.The licensed entity may be granted a license with a longer validity period but not more than three years without prejudice to the Inspection under Section 8 and Cancellation under Section 10 of this IRR. b.Exemption from the submission of the following documentary requirements in the renewal of license, to wit: Privileges BACK DOCUMENTARY REQUIREMENTS FOR APPLICATION IN THE RENEWAL OF LICENSE COMPANY WITHOUT CERTIFICATE OF GOOD STANDING COMPANY WITH CERTIFICATE OF GOOD STANDING Duly accomplished Application Form Security Survey Inspection Report x Storage Facility Inspection Report x Notarized Latest Monthly Consumption report x Proof of payment from the Land Bank of the Philippines BACK