Professionals who opened LCs, call for vehicle imports to be completed | Sunday Observer

Professionals who opened LCs, call for vehicle imports to be completed

10 January, 2021

A group of professionals, who opened letters of credit (LCs) with foreign suppliers before the ban on vehicle imports using concessionary permits, is calling on the Government to allow the shipment of these vehicles. 

The group under the name “Group of Affected Professionals Established L/Cs before March 19, 2020” consists of over 300 members including doctors, engineers, lecturers, accountants and government executives who have opened LCs to import vehicles for personal use while some have even placed orders before October 31, 2019.

Due to the Covid-19 pandemic, many barriers around the world resulted in delays of importation of these vehicles. Subsequently, when the orders were ready to be shipped, the directives issued by the Import and Export Control Department restricted shipping of vehicles after May 21, 2020 by a circular issued on May 29, 2020 in accordance with Gazette Notification No.2176/19. Despite the ban it is noted that certain parties continued to ship vehicles violating these circulars after May 21, 2020.

However, a subsequent Gazette issued by the Import Controller dated June 19, 2020 and revised on June 26, 2020 allowed to clear such vehicles which were shipped to the country between May 22, 2020 to June 16, 2020 while the ban is imposed for importation of vehicles favouring those who shipped the vehicle while the ban is in place. The affected group who have remained law-abiding citizens have further encountered immense financial and physiological trauma due to not having a clear solution to this issue.

In September last year letters were sent to the authorities highlighting this issue to which responses and solutions are yet to be received. Many other organisations have already submitted multiple requests to the authorities seeking a solution.

An official of the group said, “Our vehicles have been manufactured and have been ready to be shipped since last May. Of the 300 vehicles 120 are parked in the Singapore Port and others are at foreign yards belonging to suppliers incurring damages to the vehicles. Foreign and local suppliers have demanded demurrages and port charges of Rs.600,000 as at date. These vehicles ordered through irrevocable letters of credit cannot be cancelled either which would be a violation of international import laws.”

Some members have paid advance payments as local agents’ commissions of Rs. 300-500,000 which is also non-refundable and LC charges of Rs.100,000 so far.While taking the current situation in the country into consideration and as a solution to the issue the official said that a 360-day credit period has been offered by the suppliers.  Listed below is an excerpt of grievances forwarded to the authorities: 

“• Some of us have already sold our vehicles to raise funds to order the new vehicle. As a result many of us are using public transport to commute to essential jobs.

 • At least Rs 700,000 or more is directly invested with vehicle dealers by us for the import of the car through our duty concessionary permit. In most cases, these funds have been raised through borrowings or mortgaging property. Costs incurred thus far include advances paid to the local agent, bank charges and interest expense.”

The group calls on the Government to allow shipping of these cars for which the Letters of Credit were opened on or before March 19, 2020 enabling shipment of vehicles with 360 days credit.

Since the shipments were withheld as per the new import restriction imposed by the Government on May 21, 2020, the group requests to clear these vehicles under the previous duty structure for vehicles for which the letters of credit opened before October 31, 2019.

The group also noted that foreign exchange is leaving the country via payments of demurrage.