Cagayan Export zone(CEZ) eyed in car smuggling!

[Zeus]

Port in Enrile turf eyed in smuggling

US traders puzzled by volume of luxury cars
By Gil C. Cabacungan Jr.
Philippine Daily Inquirer
First Posted 00:42:00 07/23/2008



MANILA, Philippines—The Cagayan Export Zone (CEZ), a free port that was created at the instance of administration Sen. Juan Ponce Enrile, has replaced Subic Freeport as the place where imported second-hand luxury vehicles enter the country, according to a report of the American Chamber of Commerce (Amcham).
“If the market was only Cagayan Valley residents, why do the sales lots not carry lower-end models?” Amcham asked.
Amcham came up with the observation after its officials, accompanied by representatives of two foreign car assemblers, visited Port Irene on May 12-14. The Amcham contingent was met by James Kochner, Enrile’s son-in-law.
Asked about Enrile’s son-in-law who met with the Amcham contingent, an Enrile aide said that the senator’s family did not have a representative on the Cagayan Export Zone Authority (CEZA) and that he was just concerned about his hometown.
Enrile, who has yet to see a copy of the Amcham report, said that he was not aware that an Amcham contingent went to Port Irene.
The chamber said the current operators in the CEZ appeared to be trying to run under the radar screen by staying small. But the operators and the sales volume are steadily growing and “could someday have more of an impact on the legal auto manufacturing industry,” it said.
In the wake of the concerns raised by Amcham, the chair of the Senate committee looking into smuggling in the country said it would focus on “second wave” free ports, including the CEZ, which is located in Port Irene.
Senate hearings
In the first two hearings on smuggling by the ways and means committee, Enrile trained his guns on the car assembly industry, which he accused of using fiscal perks under the government’s car development program to bring in completely built-up units at giveaway duties.
Enrile showed a video of hundreds of brand-new vehicles of local car assemblers being rolled out at the Manila Port, failing short of directly accusing them of smuggling the vehicles being sold in their showrooms.
“We will set our sights on all free ports in the country to determine whether they are contributing to the estimated P150 billion in annual losses from smuggling,” said Sen. Francis Escudero, chair of the ways and means committee.
Asked if the CEZ in Sta. Ana, Cagayan, was included in the probe, Escudero said: “In fairness to Senator Enrile, he has always been open to an investigation of Port Irene.”
In a report based on its visit, Amcham said the CEZ had already imported 8,000 vehicles in 34 months or an average of 225 a month, most of which were sold in the Philippines.
Pajeros, BMWs
During the first four months of the year alone, 1,773 units, including Mitsubishi Pajeros and BMW Z3s, were shipped into Port Irene, or 61 percent of what was brought there for the whole of 2007.
Amcham said it saw less than 1,000 vehicles in stock during its visit, with no low-end passenger or utility vehicles among the lot.
The chamber reported that only one firm, Apollo International Cagayan Trading Corp., was authorized to import used vehicles. Seven other firms were engaged in auto conversion and resale.
“The precedent of importing used cars for local sales at remote free ports should be of concern to CAMPI (Chamber of Automotive Manufacturers of the Philippines Inc.) and national government leaders,” said the report by the Amcham-Investment Climate Improvement Project (ICIP), which was bankrolled by a US grant aimed at identifying factors that hinder domestic and foreign investments in the country.
Amcham said other free ports may be established in different parts of the Philippines that could also import just 200 a month to help local businesses.
Under different act
The chamber noted that before the Supreme Court ruling on Executive Order No. 156, which slapped a hefty tariff on each unit sold out of Subic, the CEZ sought legal action claiming that the EO did not apply to it because the free ports were operating on different republic acts.
The CEZA said used car importers in Port Irene could sell in the country pending a final court decision.
Car assemblers had successfully lobbied Malacañang to issue EO 156 in 2002. The used-car importers in Subic fought the presidential fiat for several years until the Supreme Court upheld the EO in November 2007.
“The legal action may have been prompted by the realization that the GRP [government] was not enforcing EO 156 at SBMA pending high-level judicial determination and that a similar strategy could be followed at the CEZ Freeport where limited car sales might be possible while the courts determined the application of the law,” said Amcham.
Enrile’s influence
The chamber questioned why the Bureau of Customs did not stop the CEZ car sales while failing to enforce the EO.
“It appears to defer to the influence of Senator Enrile, considered an administration ally, and may view the growing tax collections at CEZ as favorable unlike the gross undervaluation and undercollection that took place at SBMA (Subic Bay Metropolitan Authority). It seems highly unlikely that the Cagayan judge will rule against powerful local interests,” Amcham said.
Amcham said shutting down CEZ’s used-car lots would not affect the viability of the free port because these businesses were employing small numbers which could easily be absorbed by the gambling business in the area catering to foreign high-rollers.
The 13-year-old CEZ was established under Republic Act No. 7922 as the country’s first of “second wave” of free ports after Subic and Clark, originally to attract investments from nearby Taiwan.
Since there were no takers due to Port Irene’s remoteness and poor infrastructure, the CEZ took a different route and second-hand Japanese vehicles started flowing in 2005 at the height of the legal dispute between car assemblers and the Subic Freeport.
“A ‘second wave’ free port lacks any such start-up advantages, which were unique to the former US bases. The CEZ Freeport is the creation of prominent Filipino politician/lawyer/businessman, Sen. Juan Ponce Enrile, a native of Cagayan now in his 80s and a powerful figure in national politics since the mid-’60s, when he allied himself with fellow Ilocano Ferdinand Marcos. There are legislative proposals to create other ‘free ports’ by other politicians in other remote areas,” Amcham said.
The chamber noted that the CEZ created less than 3,500 jobs (75 percent of whom were employed in interactive gambling). It also said that the zone lacked a reliable power supply, an industrial estate for agro-processing or manufacturing, buildings ready for occupancy, and lodging and recreational facilities. The area also has limited air access, according to the chamber.
Correct duties
But CEZ officials argued that their imports met only local demand, that importers pay correct duties and taxes, and that the zone created employment to discourage people from joining the communist New People’s Army.
Customs officials have asserted that correct duties and taxes are paid, citing the surge in import duties from the area to P57 million in January-April this year or 70 percent more than the P81 million collected in 2007, Amcham pointed out.
“A national level BOC official reportedly visits when a shipment arrives to determine vehicular blue-book value. Duties and taxes are paid simultaneously with off-loading and movement to the sales yard area conveniently located on the main road about a kilometer from the pier and two kilometers from the main entrance to the CEZ, which consists of an archway over the road and no active controls—as in Subic—and can hardly be called a gate,” Amcham said.
Unusual focus
Enrile’s unusual focus on local assemblers came shortly after the Amcham came up with a report on the flourishing used-vehicle trade in Port Irene.
Last month, Enrile also lambasted Amcham and other foreign chambers of commerce, calling them “predators or carpetbaggers,” for allegedly interfering in efforts to bring down local power rates.
Enrile’s attack against the chambers of commerce came a day after a joint letter they sent to President Gloria Macapagal-Arroyo on May 27 was widely publicized.

source: www.inquirer.net
July 23, 2008

[Monseratto]

Hehe...na halata tuloy ang dalawang klaseng pagtupad ng batas sa kawawang Pilipinas. May batas na binabawal nga ang pagpasok ng segundo mano na sasakyan. Pero dahil sa palakasan, di ma tupad. THE LAW APPLIES TO EVERYONE.

[size=8]Enrile: Supreme Court is wrong [/size]


MANILA, Philippines—Claiming that a Supreme Court ruling upholding a government ban on the importation of used cars was wrong, administration Sen. Juan Ponce Enrile, also known by his initials JPE, Wednesday defended the entry of thousands of used vehicles into Port Irene in Cagayan, his home province.

Enrile brought along his son-in-law and used-car importers from Port Irene to the Senate to rebut a report by the American Chamber of Commerce (Amcham) that implied the Cagayan Export Zone (CEZ) in Port Irene had displaced Subic Freeport as the country’s entry point for imported second-hand luxury vehicles.

Enrile’s son-in-law, James Kocher, was part of the CEZ contingent that met the Amcham delegation, which visited Santa Ana, Cagayan, from May 12 to 14.

“He’s my son-in-law, my representative, to see to it that there is no smuggling. That’s my area. I don’t want anybody to smuggle there. If there will be smuggling there, that will be me. But modesty aside, I haven’t smuggled even a toothpick to this country,” Enrile said at a press conference.

Flourishing business

Enrile said Kocher operated the 50-hectare car yard, which is enclosed by 10-foot walls, “where all these cars go before they are registered so that there will be no smuggling.”

The operation of the yard is not a concession granted to his family, according to the senator.

Enrile, a former defense minister and acting customs commissioner during the Marcos regime, said that Port Irene’s flourishing used-car import business was legitimate and that the proper taxes on all units sold in the country had been paid.

Constitutionality of order

The senator threatened to question the constitutionality of Executive Order No. 156, a 2002 edict issued by President Gloria Macapagal-Arroyo and upheld by the Supreme Court in 2006, should Amcham and the Chamber of Automotive Manufacturers Philippines Inc. continue to push for a crackdown on second-hand vehicle imports.

EO 156 banned the importation of used vehicles for resale in the country, shutting down the multibillion-peso, used-car import business in Subic.

“The problem of car manufacturers will just get worse. The Supreme Court decision is wrong. With all due respect to them, they made a mistake,” Enrile said.

He said only Congress, not Malacañang, could ban any item from being imported, noting that the presidential decree amending the Tariff and Customs Code does not cite used cars among the banned items.

US state department

Enrile challenged Amcham, Ford, General Motors and others to show a single case of smuggling in Port Irene.

He specifically mentioned two members of the Amcham team who visited the port in May—John Forbes (who the senator claimed was introducing himself as part of the US state department) and Henry Co (chair of Ford Motor Philippines).

“I don’t care if he (Forbes) is from Timbuktu. Nobody can threaten me in my own area. Nobody can threaten me in this country. We are not doing anything illegal. If Mr. John Forbes or Mr. Henry Co can put up a plant to provide a cheap car for the people of this country, and affordable for ordinary people like you and like many ordinary Filipinos, we will close the operation in Port Irene,” the senator said.

Different market

Enrile disclosed that his group was in discussions with a foreign car maker that could build a car worth $4,000, which could run from 15 to 20 kilometers per liter of gas.

Enrile said Ford was sore because it could not boost its market share in the country as its units were expensive, gas guzzlers and took months to have a part replaced.

In the case of Japanese assemblers, Enrile said they were selling automobiles built overseas and thus were not deserving of the billions of pesos in incentives granted to them by the Board of Investments.

“The people who are buying cars in Port Irene cannot buy the cars assembled in this country, let alone the completely built-up units brought here. We’re serving a different market,” he said.

Worth defending

Enrile said the used-car business was worth defending because it served a market different from the one addressed by mainstream sellers.

“If a 1995 Pajero would be allowed by the government to run in the streets of Manila using the fuel that we have, why should not a model 1995 Pajero be allowed to be imported into this country and be used in the streets of Manila? What is the difference? Safety? Security? Health? What’s the basis?” he said.

As for his son-in-law, the senator said Kocher served as his personal representative when he and the CEZ contingent met the Amcham delegation.

“For the information of these malicious people, my son-in-law is there because I cannot go there to supervise the place. I told the locators, I will allow you to operate your business in Port Irene but no smuggling. Because I cannot go there to enforce the system,” Enrile said.

He said Kocher had nothing to do with smuggling. “If they will investigate him, what is his crime?” he asked.

Senate probe

“When the cars come to the free port, they go to a yard enclosed by a high wall and no car can get out from that yard without paying the correct taxes. Everything is recorded and we challenge anybody to go there, examine the records and find out if there are any cars that are smuggled,” he said.

The Senate committee on ways and means, chaired by Sen. Francis Escudero, is looking into smuggling in the country.

Although he refused to bill it as a “showdown,” Escudero said next month’s hearing would invite representatives from the Subic, Cebu and Cagayan free ports, along with officials of the car industry and foreign chambers, including Amcham.

“There will be no sacred cows in the hearing. Without fear or favor we will get the facts. It is not our intention to malign or destroy anyone but to simply get the facts and raise the revenues of government,” he said in a text message.

Enrile welcomed the Senate investigation but he denied that he would use the venue to “clean” his name.

“There’s nothing to clean,” he said.

Ermita defends Enrile

In Malacañang, Executive Secretary Eduardo Ermita defended Enrile, saying the senator’s home province is not a haven for car smugglers.

Ermita said he was “very sure” that the senator, who crafted the law creating the CEZ, would not allow his province to be a center of car smuggling in northern Luzon.

“I’ve known him. Who is (a national) leader that will condone illegal activities (in his own turf)?” Ermita asked.

Malacañang, however, ordered its own anti-smuggling task force to investigate the claim of the Amcham that the CEZ was being used by car smugglers.

“I asked the Presidential Anti-Smuggling Group (chief), Bebot Villar, to look at it and give us the report,” Ermita said.

http://newsinfo.inquirer.net/inquire...Court-is-wrong

[ronw123w124]

IMHO, ok lang naman sana yang mga 2nd hand imports as long as the taxes and duties are properly paid. Ang hirap naman kasi sa mga car companies di lang sila makabenta, yung mga surplus na kaagad ang pinagiinitan.

[shadow]

kaya nga biglang naging sipsip yan si Enrile kay GMA eh, kasi para hinde na pansinin lahat ng smuggling nangyayari sa port irene...

[Monseratto]

Who’s afraid of Enrile?

MANILA, Philippines—Who’s afraid of JPE?

Malacañang Thursday clammed up when asked about administration Sen. Juan Ponce Enrile’s statement challenging a Supreme Court ruling that upheld Executive Order No. 156, which bans the importation of second-hand vehicles into the country.

Press Secretary Jesus Dureza begged off from commenting on the issue when asked at a press briefing in the Palace.

A day before Dureza clammed up, Executive Secretary Eduardo Ermita said Enrile’s home province, Cagayan, was not a haven for smugglers.

“I’m not so familiar about your data yet. So I won’t comment one way or the other. I have to validate the data that you’re saying,” Dureza said when asked by the Philippine Daily Inquirer about the violation committed by Enrile in allowing the importation of used cars into Port Irene in Cagayan.

Enrile, the martial enforcer of the Marcos regime, earlier said the Supreme Court made a mistake when it upheld the legality of the EO banning the importation of used cars into Subic for resale in the country. The court ruling shut down the multibillion-peso, used-vehicle import business at the Subic Bay Freeport.

SC ruling final

Sought for comment on Enrile’s views, Supreme Court spokesperson Midas Marquez said the ruling that the senator was questioning was already final.

“The views of the good senator are respected, but the court has already spoken, and has even denied the separate motions for clarification and reconsideration. Unless this decision is revisited and reversed, it remains as case law, and it will be up to the executive officials to implement and enforce it,” Marquez said.

The American Chamber of Commerce (AmCham) claims that the Cagayan Export Zone (CEZ) has displaced the Subic Bay Freeport as the country’s entry point for imported second-hand luxury vehicles, undermining the business of car assemblers in the country.

Enrile Thursday said he would not participate in the Senate hearing next Tuesday on the alleged smuggling of used-luxury vehicles in Port Irene in Cagayan.

At the weekly Kapihan sa Senado, Sen. Francis Escudero, chair of the ways and means committee, welcomed Enrile’s decision to inhibit himself from Tuesday’s hearing on the alleged smuggling activities at Port Irene.

Escudero said that the guests at the hearing included representatives of Amcham (which sent a team to Sta. Ana, Cagayan, in May to look at its used-car import business), the Chamber of Automotive Manufacturers of the Philippines Inc. and Cagayan Export Zone Authority (CEZA).

Also invited to the hearing was Enrile’s son-in-law, James Kocher, who runs the five-hectare (not 50-hectare) auto yard, the center of Port Irene’s used-vehicle-import business.

Enrile started probe

Enrile, who instigated the Senate investigation of smuggling in the country last month, was active at the past two hearings of the Senate in which he virtually accused local car assemblers of smuggling completely built-up vehicles under the guise of getting incentives for developing a domestic-automotive industry.

Escudero said the hearing would focus on the operations of the CEZ compared with those of Subic and Clark Freeports, specifically on who was authorizing the second-hand vehicle imports, determine its legality, check whether proper valuation and taxes were paid, and who was the leader of the operations.

Enrile claimed that the Tariff and Customs Code did not specifically ban used-vehicle imports and that the President was not authorized to include such vehicles among the banned items.

While he agreed that only Congress could declare any item as a banned import like used vehicles, Escudero said the Tariff and Customs Code also gave the President broad authority to change its provisions, including the tariff levels as long as Congress was in recess.

Customs also defender

Before the Senate ways and means committee could look into the alleged smuggling at Port Irene, Customs Commissioner Napoleon Morales said there was no smuggling of cars at the port.

“The Cagayan Economic Zone Authority (which has jurisdiction over Port Irene) has been faithful in collecting taxes and other duties for imported cars. We have no reports of any car smuggling because importers are really paying their taxes,” Morales said Thursday.

The importers of the used vehicles at Port Irene paid not only the 30-percent customs duties but also the 12-percent value-added tax and 100-percent excise tax, Morales said.

He said he had asked the Department of Finance for a legal opinion on whether the Supreme Court decision on the Subic case may be applied to other economic zones.

Morales said he made the request in December 2007 but had yet to receive a reply.

He said the Bureau of Customs could not implement EO 156 or the ban on second-hand motor vehicle imports at Port Irene, after importers questioned the constitutionality of the order and EO 418 (2005), which modified the tariff and duties collected on imported used vehicles, before a Cagayan court.

Morales said Malacañang wanted P500,000 paid for an imported second-hand vehicle on top of the duties and taxes.

“But we’re maintaining the status quo and we can’t impose EO 156 and even EO 418 at Port Irene pending the decision of the court. For the meantime, we’ll continue collecting taxes at the usual rate without the P500,000,” Morales said.

No basis yet

Told that President Gloria Macapagal-Arroyo herself issued EO 156, Dureza said: “I’m not prepared to make a determination, or a statement on that because it’s not easy to immediately issue a comment when I have yet to validate the data that you’re citing. So at another time, I will give you my take on it.”

Dureza said as much when asked about the Palace position on whether to sanction Enrile, or his son-in-law James Kocher, for using Port Irene as a haven for second-hand vehicles.

“Well, there is no basis on my part to give a statement on that one way or the other because I don’t have basis yet,” he said.

Dureza was interviewed after the President sworn in Enrile’s wife Cristina as the Philippine envoy to Vatican. The senator witnessed the 2 p.m. event held in Malacañang’s Rizal Hall.

Enrile’s wife

Cristina was among those who participated in the oath-taking of 47 generals and flag officers, 27 star-rank police officials, and other newly appointed officials, including former Sen. Vicente Sotto III, who is now chair of the Dangerous Drugs Board, Commission on Audit Chair Reynaldo Villar and four ambassadors. With a report from Leila Salaverria

http://newsinfo.inquirer.net/inquire...raid-of-Enrile

[CVT]

Whew! Mayroon ba nito?....

6505:Bath:

[glenngj]

“He’s my son-in-law, my representative, to see to it that there is no smuggling. That’s my area. I don’t want anybody to smuggle there. If there will be smuggling there, that will be me. But modesty aside, I haven’t smuggled even a toothpick to this country,” Enrile said at a press conference.

ayos sa palusot..

[Monseratto]

“He’s my son-in-law, my representative, to see to it that there is no smuggling. That’s my area. I don’t want anybody to smuggle there. If there will be smuggling there, that will be me. But modesty aside, I haven’t smuggled even a toothpick to this country,” Enrile said at a press conference.

ayos sa palusot..

What he really meant was: "I put my son-in-law to make sure I get my slice of the pie. Modestly aside, I've been doing this since Marcos was my boss...TADAHHH!" Want to see a pencil disappear?

[Zeus]

Hehe...na halata tuloy ang dalawang klaseng pagtupad ng batas sa kawawang Pilipinas. May batas na binabawal nga ang pagpasok ng segundo mano na sasakyan. Pero dahil sa palakasan, di ma tupad. THE LAW APPLIES TO EVERYONE.



http://newsinfo.inquirer.net/inquire...Court-is-wrong

Hinahamon pa ang SC e Sa Subic dati mga Magsaysay yata ang nagpapasok e, ngayon dito naman

[glenngj]

What he really meant was: "I put my son-in-law to make sure I get my slice of the pie. Modestly aside, I've been doing this since Marcos was my boss...TADAHHH!" Want to see a pencil disappear?

yes sir i agree, during his interview kasi todo deny sya na walang smuggling na nangyayari. kaya ayos sa palusot, kasi kesyo pinapuwesto pa nya manugang nya para mabantatayan "daw" kung meron man..