Four agencies of the government may have allowed smuggling activities at Port Irene in Cagayan province for disregarding a Supreme Court decision and an executive order that prohibit the importation of used cars in freeport zones, an administration senator said Tuesday.
In a Senate hearing on alleged smuggling activities in Port Irene, Sen. Joker Arroyo said that by going against a Supreme Court decision which upheld Executive Order 156, four agencies under Malacañang--Cagayan Export Zone, Bureau of Customs, Bureau of Internal Revenue, Land Transportation Office--may have unwittingly engaged in illegal activity.
President Arroyo's Executive Order 156, which prohibits the use or sale of imported second-hand vehicles outside freeport zones, was upheld by the high court in November 2007.
Cagayan Export Zone Authority (CEZA) Administrator Jose Mari Ponce admitted during the hearing that despite the SC decision, the port authority still allowed the release of the imported vehicles outside Port Irene.
He said a total of 9,000 second-hand vehicles, mostly from Japan, have been sold at the port since 2005.
Ponce claimed the imported cars were brought out of the economic zone after going through CEZA, Bureau of Customs (BoC), Bureau of Internal Revenue (BIR) and Land Transportation Office (LTO).
"Agencies of the executive branch of government participated in what may, I’m not saying it is, but what may be an illegal act," Arroyo said.
He added that the LTO had the last touch before the "forbidden cars" were allowed to roam around the country.
In response to Arroyo's statement, Finance Undersecretary Estela Sales said the executive order has not been implemented because there is a pending case before the Cagayan Regional Trial Court about its legality. This case was filed before the high court’s ruling became final and executory.
The lower court case was filed May 2005, Sales told the Senate.
LTO chief Alberto Suansing, meanwhile, said that since vehicles’ duties and taxes have been paid to the BIR and BoC, his agency "had no recourse" but to register the used cars.
25-step process
Ponce described the process that each used-car has to go through before being allowed out of the economic zone.
He said the vehicles have to go through 25 steps, including the acquisition of import permits, stencil check-ups, and duty and tax payments that go through wire transactions from different government offices from Manila to Cagayan.
The final steps include the importing agency’s application for a gate pass for the vehicles out of CEZA and the final inspection of the BoC.
Sen. Juan Ponce Enrile, who had inhibited from the hearings because Port Irene is his turf, had claimed there is no smuggling being committed at the economic zone.
Enrile said the used cars being imported to the port are already five years old and go through the legal processes.
No mention of smuggling
At the opening of the hearing, a representative of the American Chamber of Commerce of the Philippines (Amcham) denied newspaper reports that the group had implied that there is smuggling in Port Irene.
"Contrary to news reports, the American Chamber of Commerce of the Philippines has never made a public statement or released a report adverting to the occurence of smuggling in Port Irene," Robert Sears, AmCham executive director, said.
Sears clarified that the letter AmCham sent to Finance Secretary Margarito Teves last May, which was used a reference of newspaper reports, did not mention smuggling.
He said the business group even commended the government for gaining "positive headway" in the enforcement of regulations on the used-vehicle importation through the Executive Order 156, which provides "for a comprehensive industrial policy and directions for the motor vehicle development program and its implementing guidelines."
"We remain hopeful that government will continue its enforcement efforts," the American businessman said, reading from AmCham's official statement.
A Philippine Daily Inquirer newspaper report said AmCham suspects second-hand car operators in CEZ seemed to be "trying to run under the radar system" by staying small.