The Daily Manila Shimbun

 

Customs did not clear Hyundai Asia Resources to import knocked down units

January 20, 2018



Customs chief Isidro Lapeña said that the Bureau of Customs (BOC) has not given clearance to Hyundai Asia Resources Inc. (HARI) to import knocked down (KD) units, which has been the subject of an investigation by another government agency.

Lapeña added, in a statement late Friday, Customs is taking cognizance of the decision made by the Bureau of Investments (BOI) after the latter concluded its probe on the operations of HARI.

The BOI has suspended certificates of registration of HARI in the Motor Vehicle Development Program (MVDP) under Executive Order No. 156.

EO 156 provides for a comprehensive industrial policy and guidelines for MVDP.

Article 1, Section 1.2 of EO 156 requires “that the assembly of motor vehicles shall be in CKD condition only”. MVDP participants shall also “engage into which shall involve at least the basic processes of assembly operation such as welding, painting, trimmings, final assembly, and quality testing to producecompletely-built up (CBU) motor vehicles”.

The BOI discovered HARI has been violating the terms of its registration and was importing semi-knocked down (SKD) kits instead of completely knocked down (CKD) parts and components.

As a registered MVDP participant, HARI enjoys an incentive of paying only one percent duty for CKD importations.

BOI sanctioned HARI and has ordered the refund of VAT and customs duty waived in the amount of more than P1 billion as an incentive.

In its letter to the BOC, the BOI said the registration is suspended pending compliance with two conditions, one of which is the “refund of tax and duty differential between the CBU and knock down parts and components on all importations pursuant to EO 156.”

BOI said the  amount of refund, mode of settlement and period for payment shall be determined by the BOC.

“On our part, we will pursue what is advantageous to the government.  We will conduct post-entry audit of its importation to determine the actual refund to be paid to the government,” Lapeña said. DMS