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BoC clears Korean firm of anomalies in car import

The Bureau of Customs (BoC) yesterday cleared one of the country’s largest importers of vehicles of any wrongdoing in its importation of P3.8-billion knocked down (KD) units of motor vehicles from South Korea.

However, during the resumption of the congressional inquiry into the Motor Vehicles Development Program (MVDP) conducted by the House committee on ways and means, lawmakers demanded a clear definition of KD and completely-built unit (CBU) after the BoC and the Board of Investments (BoI) clashed with their respective definitions of the terms considered by the latter in its implementation of the program.
Representatives from the BoI told lawmakers that it has granted Hyundai Asia Resources Inc. time to address what the agency previously believed as violations of the MVDP that grants importation tax of a mere one percent for participating vehicle manufacturers and importers.
BoI Governor Henry Cua said from a whopping P1 billion payment of Customs duties and cancellation HARI’s MVDP certificate, BoC granted the firm time to put in place its assembly facilities for units brought into the country as KDs.
HARI counsel Alex Cabrera said the importation of units they consider as KD and their utilization of the MVDP benefits were made in “good faith.”
Noting that the BoC and BoI have adopted varying definition of what KD and CBUs are, Deputy Speaker Sharon Garin urged BoI to exercise “prudence” by defining clearly the difference between the two methods of importing vehicles.
The BoC revealed that it had twice conducted inspection of the containers carrying the units at the Batangas port and found no violation in the importers declaration of the cargoes.
“As stated by the collector of Batangas, there was no misdeclration in this case. We also checkec the records at the port of Batangas,” District Collector Reynaldo Galeno said.
On the other hand, Customs Deputy Commissioner Edward Dy-Buco revealed the agency has called on the BoI to guide the BoC on “how to arrive at a proper computation” of duties and other fees.
At the same hearing, Cabrera, HARI senior technical adviser, said it is operating under the BoI authority provided under EO 877A, an amendment to EO 156, which governs the manufacture of knocked down vehicles.
Saying they have only started operation less than six months when BoI started pursuing their firm, Cabrera stressed that they have submitted all requirements like its technical license agreement (TLA) with Hyundai Motors Corp. of Korea that clearly lays down HARI’s assembly process, including the complete list of “knocked down” car parts and components for importation. All these were received and approved by
HARI officials who vowed to invest more than P2 billion in the country in the next two years and further enhance its assenbly facilities to make them capable of producing 30,000 cars annually.
Batangas Rep. Lianda Bolilla, committee vice chairperson, noted that implementing rules and guidelines issued by the BoI gave the notion that units that are not CBUs should be considdred as KDs.
On the other hand, Quirino Rep. Dax Cua, committee chairman, stressed that government agencies should be careful in setting rules for investors, saying they should be advocates of a “level playing field.”
“In its desire to provide better and cheaper vehicles, government must set a criteria that will be applicable and clear to all players,” Cua said.
The ways and means committee is conducting an inquiry in aid of legislation into HARI’s alleged violation of its MVDP registration. Committee chair, Quirino Rep. Dakila Cua and other committee members want to know how to further improve laws and regulations governing the assembly or manufacture of vehicles in the country.

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