Vehicle importation legal, says Cagayan firm

MANILA, Philippines - The Automotive Rebuilding Industry of Cagayan (ARIC) clarified over the weekend that their operations in the Cagayan Special Economic Zone and Freeport at Port Irene in Santa Ana, Cagayan are legal.

ARIC president Jaime Vicente explained the Supreme Court (SC) decision issued last Jan. 7 in the case of Executive Secretary et al., vs. Forerunner Multi Resources Inc. is not yet final and executory.

He said Forerunner had already filed a motion for reconsideration of the high court’s decision.

Vicente pointed out the SC decision was merely on the issue of preliminary injunction, not on the main case which is still pending with the Regional Trial Court of Aparri, Cagayan.

“In other words, the decision dealt only with Forerunner’s legal right to seek preliminary injunctive relief. Thus, the main issue on Forerunner’s legal right to import used motor vehicles is yet to be finally resolved by the courts,” Vicente said.

Vicente sent a letter to the Bureau of Customs, the Land Transportation Office (LTO) and the administrator-CEO of the Cagayan Export Zone Authority (CEZA), saying Forerunner, the importer involved in the main case, had already stopped operations as early as January 2012 in compliance with the temporary restraining order issued by the SC in a resolution dated Jan. 16, 2012.

Vicente clarified the latest importation reported in media was made by Fenix (CEZA) International, Inc., and not by Forerunner.

Fenix invoked Executive Order 418, “Modifying the Tariff Nomenclature and Rates of Import Duty on Used Motor Vehicles Under Section 104 of the Tariff and Customs Code of 1978” issued on April 4, 2005 which allows the importation of used motor vehicles.

Fenix did not invoke Executive Order 156 that banned the importation of used motor vehicles.

EO 156 prohibits the importation of all types of used motor vehicles, parts and components, and was issued by then President Gloria Macapagal -Arroyo on Dec. 12, 2002 in a bid to protect the local motor vehicle industry.

Exemptions to the EO, however, are brand new vehicles of current year model that have a mileage of less than 200 kms., vehicles owned by a returning resident or immigrant which can not be sold for at least three years, a vehicle for the use of an official of the diplomatic corps, trucks (except pick-up trucks), buses and special purpose vehicles.

Vicente emphasized “the constitutionality of EO 418, except Section 2 thereof which imposes P500,000 in addition to regular duty for imported used motor vehicles, was upheld by the SC in the case of Executive Secretary vs. Fenix (CEZA) International, Inc., promulgated on Nov. 15, 2010.”

The Fenix decision is already final and executory, and writs of execution were issued to execute the said decision, he said.

A Writ of Execution was issued by Judge Conrado Manauis of Branch 08 of the Cagayan Regional Trial Court on June 14, 2011. Similar writs of execution directing the Bureau of Customs and the CEZA to obey the Fenix decision were also issued. It was in compliance with such writs of execution that the BOC, CEZA and LTO allowed the importation by Fenix, which is valid and legal, Vicente said.

Lucrative trade

Used vehicle importers operating at the Cagayan special economic zone in Sta. Ana town are reportedly defying the ban by continuing to bring in second-hand cars from Japan.

The used car importation business used to flourish at the Subic free port. But when the entry of used cars was prohibited in Subic, importers based there moved to the Cagayan special economic zone, where they found the business to be more lucrative since they could bring in even late model luxury vehicles.

Last week, a shipment of 200 cars arrived at the Sta. Ana port. Hundreds more are said to be arriving in the next few weeks, free port officials have announced.

The officials claimed that the SC ruling does not cover the shipments since they had already issued the import permits for them before the high tribunal upheld the importation ban.

However, Customs Commissioner Ruffy Biazon said his agency would not process the imported cars’ papers and not accept payment of duties for them.

Without such documents, Biazon said the vehicles could not be registered with the LTO.

“All motor vehicles registered in violation of EO 156 can never be renewed again. If ever renewed, such registration is considered illegal and any LTO official found to have registered vehicles in violation of EO 156 can be held criminally and administratively liable for his illegal acts,” the LTO said in a statement.

The Cagayan special economic zone in Sta. Ana town is a creation of Senate President Juan Ponce Enrile, as the main author of the CEZA charter.

His son, Cagayan Rep. Juan Ponce “Jack” Enrile Jr., supported the SC ruling banning the importation of used cars, including those entering the country through the CEZA.

“Those who have a problem with the Supreme Court ruling can contest it, but any such importation must stop in the meantime,” the younger Enrile said.

“If there were instances of importations in defiance of the ban, backed with documentary proof, such matters should be taken directly to the customs officials, to the mayor or to the governor. Those found to be defying the order not to import used cars must be arrested,” he added.

Finance Secretary Cesar Purisima suggested vehicles plying the thoroughfares of freeport zones must be color-coded for easy monitoring by authorities.

In his Twitter account, Purisima said the LTO “should issue different colored and distinct car plates for vehicles brought in for freeport zone use only.”

The use of color-coded plates will allow authorities to keep tabs on the second-hand cars and their owners and ensure they only ply within the freeport zone, he said.

While CEZA locators are allowed to import vehicles, these vehicles cannot be driven out of the freeport zone.

Sen. Miriam Defensor-Santiago said she would initiate a congressional inquiry into the used vehicle importation in Cagayan.

She noted reports that Enrile’s son-in-law is leasing a huge lot to importers but he is not into car importation or trading himself.

Vice President Jejomar Binay’s United Nationalist Alliance (UNA) tried to put political color to the importation ban by claiming it might have been intended to put Enrile in bad light.

Administration lawmaker Eastern Samar Rep. Ben Evardone said it was wrong for UNA to insinuate that politics could be behind the used car import ban.

“It’s the ruling of the Supreme Court. It’s part of the law of the land, which the government is bound to enforce. Injecting politics into it is stretching it too far,” he said.

– With  Jess Diaz, Zinnia de la Peña