According to Member of Parliament for St Andrew North Central Karl Samuda, Jamaica could be losing thousands in import revenues from an agreement between South Korean Hyundai Motor Company and Kingston Wharves for use of the location as a regional hub for its vehicles.

Hyundai, one of the world’s largest automotive manufacturers, announced in September the appointment of Magna Motors Dealership Limited as the official Hyundai distributor in Jamaica.

During a presentation in the House of Representative on Tuesday, Samuda questioned Industry, Investment and Commerce Minister Anthony Hylton on his knowledge of Magna Motors operating a regional hub at the Kingston Wharves without an importation certificate from the Trade Board Limited, for which Hylton has responsibility.

Samuda explained that three shipments of vehicles have already been made into the Wharves Free Zone by Magna Motors without the required import certificate, allowing the company to store vehicles on the wharves without paying the respective fees for storage — fees that would be three times the value of the vehicles.

“If you have 200 vehicles on the wharves in Jamaica in a Free Zone that do not attract any form of duty instead of going through a bonded warehouse because they are new distributors for Hyundai in Jamaica, I put it to you, Minister it is highly likely that those vehicles are destined for the Jamaican market,” Samuda stated.

“But in the interim they will be paying no duties, they will not require a bond which is normally the case with every other importer, and if that bond it is not paid within one year Customs will come and demand that is paid. So they are getting a bligh by being in the Free Zone to the disadvantage of every other dealership in Jamaica.

“I want to know if the country is being denied of revenues,” Samuda insisted.

In his defence, Hylton stated that he was not aware of Magna Motors shipping vehicles into the country without the required importation licence, and noted during his presentation that any company importing vehicles into Jamaica without the required documents would be in breach of the Customs Act.

“My concern behind all of this is that by going into a Free Zone you avoid having to pay any duty in the event that you don’t ship the vehicles out of Jamaica. So I must know whether these vehicles are destined for the Jamaican market or for markets outside of Jamaica,” Samuda demanded.

Hylton stated that he is aware of Magna Motors having a contractual arrangement with Kingston Wharves for the transshipment of vehicles in regional and domestic markets, but added that he was not aware that Kingston Wharves is not the consignee for the vehicles.

Last month, Chief Executive Officer of Kingston Wharves Grantley Stephenson revealed that the wharves were being used as a regional hub for Magna Motors for the transshipment of vehicles to regional and domestic markets.

“They are already here,” Grantley reportedly explained, in reference to Hyundai, while adding that Kingston Wharves is now warehousing the company’s vehicles.

Checks by the Jamaica Observer revealed that Magna Motors is not listed as an importation certificate holder by the Trade Board Limited. The Board requires any individual seeking to import vehicles into the country to receive a certificate prior to shipment in Jamaica.

Goods imported in a Free Zone do not require an import licence or permit, but in order for the imported vehicles to enter the domestic market, the importing entity is required to obtain a permit.

According to Samuda, vehicles for the domestic market are usually brought in and placed in a bonded warehouse, without need for entering the Free Zone.

“In fact, the Free Zone is for the purpose of facilitating transshipment. Now it must have occurred to you, having been told that there are shipments of vehicles in the Free Zone, as to what the plans are with respect to those vehicles. So how come they would send it to the Free Zone instead of Jamaica if they are intended for the domestic market?” he questioned Hylton.

“Or for that matter they wouldn’t have to send them to a Free Zone, they would simply transship them to another country. I come back to why I am specifically concerned about this strategy of putting it into a Free Zone,” Samuda persisted.