Hyundai Asia Resources, Inc. (HARI), the exclusive distributor of Hyundai cars in the Philippines, has decried the accusations of plunder, smuggling and estafa hurled by the Volunteers Against Crime and Corruption (VACC) against the company, Trade Secretary Ramon Lopez and several others as baseless and “pure and simple harassment”.

In a statement issued last week, HARI president and CEO Maria Fe Perez Agudo said there is nothing irregular with the Board of Investments’ (BoI) action of reconsidering its earlier decision of cancelling, and instead suspending, HARI’s assembly license under the government’s Motor Vehicle Development Program (MVDP) due to alleged inadequacy (not absence) of painting and welding activities in its assembly process.

“We sought reconsideration of BoI’s original decision to cancel our MVDP license as matter of right and as allowed by BoI rules,” Agudo said. She stressed that HARI’s motion for reconsideration and reinvestigation were all part of due process. “Whatever the final decision of BoI was based on lawful deliberations even if we believe we are the victim, not a conspirator as VACC alleges,” she added.

Acting on unnamed sources, the BoI had earlier accused HARI of violating its MVDP license, EO 156 in particular. Aside from insisting that importation of car parts should be on a CKD basis, it also concluded – after an ocular inspection of HARI’s assembly plant in Sta. Rosa, Laguna – that the firm’s assembly process had “zero” welding and painting activities.

Insisting that it has the required activities, HARI requested for a reinspection. The joint ocular inspection confirmed there were indeed painting and welding activities, but BoI still insisted that these were not in the quantity and scope required by “industry standards”.

In its motion for reconsideration, HARI also raised the following defenses:

EO 156 which prescribed that importation of car parts must only be on CKD basis has been repealed/amended by EO 877-A. The latter allowed the importation of KD parts, a common practice in countries with similar KD assembly programs in the region;

All of HARI’s importations were approved by the BoI and covered by Electronic Certificates of Authority to Import “KD parts”. More importantly, BOC officials confirmed, “under oath,” during a recent congressional hearing, that HARI’s importations at the Port of Batangas were indeed KD parts, not CBUs or Completely Built Units;

There are no specific guidelines on the quantity and scope of painting and welding activities required under MVDP. In the absence of such clear guidelines, there can be no violation to speak of; and In its initial decision, BoI required HARI to refund the VAT and Customs Duty waived under MVDP. BoI pegged the amount at P1.1-billion but nowhere in its ruling did it explain or demonstrate how it arrived at said figure. “Afterwards, the BOI, realizing the merits of HARI’s assertions, resolved to suspend, instead of cancel, our assembly license for six (6) months. Acknowledging the legal and administrative competence of the Bureau of Customs, BoI also passed on to the bureau the task of computing the duty and tax differential, “Agudo pointed out. While HARI originally planned to appeal BoI’s decision to the Court of Appeals on substantial legal grounds, it opted to abide by the ruling for practical and long term business considerations. As proof of good faith, she said HARI has been introducing additional painting and welding activities and would refund the VAT and duty differential being computed by BOC, as preconditions for the lifting of its MVDP suspension. Unfazed by VACC’s complaint, Agudo said the company and its executives are ready to answer all charges at the proper time and forum./au

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