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PRESIDENTIAL DECREE NO. 618
PRESIDENTIAL DECREE NO. 618 -
AMENDING FURTHER Section TWELVE OF REPUBLIC ACT NUMBERED SEVENTEEN
HUNDRED AND EIGHTY-NINE, AS AMENDED, OTHERWISE KNOWN AS THE REPARATIONS
LAW
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WHEREAS,
under the present provisions of the Reparations Law (Republic Act No.
1789, as amended), the acquisition and use of reparations goods is
limited to Filipino citizens and entities wholly owned by the Filipino
citizens; chanroblesvirtualawlibrary
WHEREAS, the same law provides that groups, associations and
corporations which are recipient of reparations goods shall not permit
a subsequent change in ownership or control as shall at any time
thereafter, change the control or ownership wholly held therein by
Filipino citizens; chanroblesvirtualawlibrary
WHEREAS, entities that have fully paid for their reparations goods are
included in, and subject to the above restriction, and cannot,
therefore, avail of foreign investments for purposes of expansion and
development;chanroblesvirtualawlibrary
WHEREAS, due to the scarcity or non-availability of financing from
local sources, and in line with the declared policy of the State to
encourage foreign investments in certain areas of business activity in
order to accelerate the economic development of the country, there is a
need to amend the Reparations Law, in order to allow foreign
investments in certain cases;chanroblesvirtualawlibrary
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines,
by virtue of the powers vested in me by the Constitution, do hereby
decree and order, and make as part of the law of the land the amendment
of Section 12 of Republic Act No. 1789, as amended, as follows:cralaw:red
Section 1. The fifth paragraph of Section 12 of
Republic Act No. 1789, as amended, is hereby amended to read as
follows: chanroblesvirtualawlibrary
"Sec. 12. .
"The contract of sale shall bear the conditions that no capital goods
thus acquired shall be resold, leased or in any other manner disposed
of except to Filipino citizens or to entities wholly owned by Filipino
citizens who shall continue the utilization thereof in the projects for
which the goods were originally intended or in similar projects
included in the economic development program of a similar priority,
subject, however, to the further condition that groups, associations
and corporations which are recipient of such goods shall not permit any
subsequent change in ownership or control as shall at any time
thereafter change the control of ownership wholly held therein by
Filipino citizens: Provided, however, that, subject to the approval of
the President of the Philippines on a case to case basis upon
recommendation of the National Economic and Development Authority,
recipient corporations or associations which have fully paid for such
goods may allow foreign equity participation therein when the same is
necessary for further development and expansion, on condition that the
corporation or association shall maintain Filipino ownership of at
least seventy per centum of the capital stock outstanding and entitled
to vote, and that seventy per centum of the members of the Board of
Directors shall be Filipino citizens: Provided, further, that the
corporation or association in which such foreign investment has been
made shall report the same to the Board of Investments within
thirty days after the investment is received by it, and investments
made in the form of foreign exchange or other assets actually
transferred to the Philippines shall also be registered with the
Central Bank of the Philippines pursuant to Section 2(2) of Republic
Act No. 5455, as amended. It shall further contain a provision that any
transfer of ownership, whether by virtue of a private contract or
through court proceedings shall be to Filipino citizens or to entities
wholly owned by Filipino citizens; Provided, however, that, subject to
the approval of the President of the Philippines on a case to case
basis upon recommendation of the National Economic and Development
Authority, transfer of ownership of such capital goods which have
already been fully paid for may be made to corporations or associations
organized and existing under the laws of the Philippines of which at
least seventy per centum of the capital stock outstanding and entitled
to vote is owned and held by Filipino citizens, and at least seventy
per centum of the Board of Directors are Filipino citizens, who shall
begin utilizing them in such projects as the National Economic and
Development Authority shall determine within one year from notice of
the Authority's decision."
Section 2. All provisions of existing laws, decrees,
orders, rules and regulations, or parts thereof, in conflict or
inconsistent herewith, are hereby repealed or modified accordingly.
Section 3. This Decree shall take effect
immediately. chanroblesvirtualawlibrary
Done in the City of Manila,
this 20th day of December, in the year of Our Lord, nineteen
hundred and seventy-four.
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