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Kingston Wharves says Magna arrangement poses no threat to nation's revenue

Published:Friday | November 13, 2015 | 11:00 AM
File Karl Samuda
Contributed A rear view of the 2015 Hyundai Sonata.
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Mark Williams, the chief operating officer, Kingston Wharves Limited (KWL), said his company's relationship with Magna Motors does not pose a threat to other local motor vehicle dealers nor the country's revenue.

Karl Samuda, opposition spokesman on industry, used the floor of parliament last week Tuesday to claim that Magna Motors is "getting a bly" by being on the free zone to the disadvantage of every other dealership of Jamaica."

He also said the arrangement is "denying the country's revenue by sidestepping and going into a free zone, that it does not need to go into."

Motor vehicles imported by Magna Motors Dealership, distributor of Hyundai in Jamaica, are being stored at Kingston Wharves, a company which was last year granted a free zone licence.

Samuda charged in parliament that the vehicles have been imported without the requisite licences and, in the normal course of business, importers who bring in goods without such permits are fined three times the value of the goods. He said Magna is awaiting the grant of import licences from the trade board with a view to having the vehicles released into the domestic market. The current situation, he said, constitutes unfair trading practice and an abuse of free zone laws.

Williams, contacted by The Gleaner via email, said there was a functional regulatory monitoring of all goods' movement in and out of its facilities.

"Any cargo, including motor vehicles, which are to exit KWL, will only do so under release by the Jamaica Customs Agency (JCA) upon the satisfaction of their requirements, which include the payment of applicable duties," Williams said.

 

Details of imports

 

"We are not at liberty to provide details of imports by Magna Motors Dealership. however, we can say, categorically, that all our operations met with the satisfaction of the Government's import and duty requirements, which holds that no cargo be released to the domestic market without being properly duty-paid," he added.

In questions tabled weeks before, Samuda asked if industry minister Anthony Hylton was aware that three shipments of cars had been imported into Jamaica without import licences, and were being stored on the wharf.

"I am not aware of three shipments of cars have been imported into Jamaica without import licences. Several shipments of motor vehicles are imported into Jamaica on a weekly basis," the minister said.

Hylton stated that, in keeping with the Customs Act, any vehicle imported for the domestic territory of Jamaica, without a permit issued by Trade Board Limited, is in breach of the Customs Act, and there is a penalty that is imposed by the JCA.

He said storage of motor vehicles is an allowable activity under free zone laws.

"Goods imported into a free zone do not require import licence or permit. Therefore, the JCA can act in accordance with the provisions of the free zone Act to allow the storage of motor vehicles in a free zone. However, in order for these motor vehicles to enter the domestic market, the importing entity is required to obtain an import permit from the Trade Board Limited," Hylton said.

Samuda said in parliament that if the vehicles are destined for Jamaica, they should be stored in a bonded warehouse, as is the case with other dealerships, and not in a free zone.

"By going into a free zone, you avoid having to pay any duties, in the event that you don't ship it out of Jamaica," Samuda argued.

Hylton, however, said he was unable to respond to the specific questions as those would need research.

"I neither work with the customs agency nor am I required to know what happens on the wharf of Jamaica," Hylton said.

 

Regional hub

 

He said further that he was aware that Hyundai Motors Limited had entered into an arrangement with Kingston Wharves. It has been publicly announced that Hyundai will now make Kingston Wharves its regional hub for shipping its cars.

"Hyundai has shipped a number of vehicles to Kingston Wharves Limited for Kingston Wharves Limited to transship, in some instances, and ship into the Jamaican market, in other instances," the minister said.

Samuda argued that Magna Motors had brought the vehicles into the island under the guise of the free zone, "because they know they don't need a licence into the free zone"; but will now be applying for a licence to have them released into the domestic market.

"If they do not have an import licence, and they have to go into anywhere else but the free zone, the fine for shipping before getting the licence is three times the value of the vehicle. That is what they are avoiding by using this ruse that they are going into a free zone that does not have a fence," Samuda said.

Magna Motors did not comment on the issue while Jamaica Customs said it cannot comment or discuss issues relating specifically to an importer in this case Magna Motors.

Kingston Wharves said the commercial facilities provided to Magna Motors are "non-exclusive and, by extension, available to other local and international dealers".

"In fact, we are in discussions with additional local dealers, and welcome the interest of all importers and exporters who are interested in accessing our warehousing and logistics services," Williams said.

Commissioner of Customs Major Richard Reese said there are safeguards in place to ensure there is no revenue leakage as a result of vehicles leaving free zones to the domestic market.

"The MIIC [Ministry of Industry, Investment and Commerce] has to grant permission /approval for goods leaving the Free Zone to the domestic market. For vehicles at Kingston Wharves Free Zone, there is customs presence, dual custody and CCTV and all requisite permits or licences must be presented to customs before any vehicle is released to the domestic market," Reese said.