This NGO called Volunteers Against Crime and Corruption, or VACC, is building up a P1-billion smuggling case against one of the biggest car sellers in the country: Hyundai Asia Resources.
That is the subsidiary of South Korea’s Hyundai Motor Co., the third biggest in the world, with yearly revenue of more than $80 billion.
About two weeks ago, VACC came out with a press statement to chase what it called the P1-billion smuggling issue against Hyundai.
Surprise—absolutely no media outfit picked up the statement for whatever reason.
About three months ago, Trade and Industry Secretary Ramon Lopez, who is also BOI chair, reportedly expelled Hari from the program called MVDP.
That was the Motor Vehicle Development Program of the cute administration of Gloriaetta that came about just a few months before its term ended in 2010.
By the way, the chaste and pure Aquino (Part II) administration came up with its own freebies program called CARS, or Comprehensive Automotive Resurgence Strategy, which took effect just a few months before its term ended in 2016 also.
Something in those last few months perhaps inspired those two administrations to give away billions of pesos worth of tax breaks to huge import-dependent foreign car firms at the last minute.
Anyway, Hyundai already enrolled in the old MVDP, but it reportedly also planned to join the CARS together with Japanese giants Toyota and Mitsubishi.
But last June, Lopez reportedly threw Hyundai out of the MVDP, plus he wanted it to return some P1 billion to the government.
The amount represented the import duties that Hyundai was able to avoid because of its participation in the old MVDP.
Our supposed “car manufacturers” actually import almost everything, either as SKD (semi knocked down) or CKD (completely knocked down) units.
The MVDP required its members to import CKDs, so the “car manufacturers” would still have to do some work here, i.e. assembling the vehicles.
For SKD units, in comparison, the “car manufacturers” would not have to do anything except perhaps testing the batteries.
In his order last June, Lopez noted that the SKD units of Hyundai even had vehicle identification numbers.
Under the MVDP, participants would have to pay only 1 percent duty for CKDs, but they must pay 20 percent for SKDs.
When the BOI team checked on the shipments of Hyundai, they found out that the company declared the units as CKDs, which were actually SKDs.
Lopez subsequently asked Hyundai to present its side in the findings of the team, but he reportedly said he was not satisfied with the explanation.
From what I gathered, Lopez still could not decide whether or not to file smuggling case against Hyundai with the Bureau of Customs.
But it seemed that VACC already decided for him.
According to VACC statement, its general counsel Ferdinand Topacio already wrote the BOI for documents on the Hyundai case, who invoked Executive Order No. 2 of the motorbike-riding Duterte Harley, otherwise known as the “Freedom of Information Order.”
VACC believed the BOI records should prove the case of technical smuggling against the company, noting that only one daily carried the story.
Topacio wrote the BOI: “More than a month has passed since the article was published, and yet to date, we do not know if Hyundai was made to pay for its wrongdoing.”
He added: “There has been a total media blackout on this issue; the silence is deafening.”
The case would certainly affect the bid of Hyundai to join the CARS program.
The company had some hit models in the domestic market last year, particularly the Eon model in the “city car” category, which sold some 12,000 units last year alone.
By the way, Eon was the model reportedly involved in the smuggling case.
The Eon cars are assembled in India.