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"Do I hear $8,000?" - MPs selling car perks

"Do I hear $8,000?" - MPs selling car perks

T here is another source of the swanky, new, top-of-the-line cars in Phnom Penh

other than good old-fashioned smuggling.

Licenses for importing duty-free

cars, given to Members of Parliament as one of the perks of office, are being

sold by some MPs to the highest bidder.

The licenses, which entitle the

120 MPs to import any car of their choice without paying import duties and

taxes, are being sold to those willing to pay the right price by MPs who either

don't need another or can't afford a new one.

"If you are planning to buy

a very expensive new car, it is useful to have an import duty exemption because

you will save thousands of dollars on import duty," says one MP who admitted

selling his license last month.

"But most of us can't afford expensive

cars anyway and have decent cars already," he said.

The question of

granting duty-free car licenses to MPs was debated during the first

parliamentary session in 1993 when MPs voted on their salaries.

The

decision to allow MPs to import duty-free cars was made, according to one MP,

"because it was the practice during the Sihanouk period."

In early 1994,

the Cabinet and later the Ministry of Finance - then headed by Sam Rainsy -

agreed to the proposal.

MPs who wanted to get a license were asked to

write to the Ministry of Finance for permits.

One MP said: "If we want to

get the permit, we write to the ministry saying: 'I am the Member of Parliament

from such and such a province and I would like to be permitted to import one car

duty-free'."

"The Ministry writes 'approved' and stamps the same letter.

This is the import permit."

MPs began to sell their permits in 1994 for

$4,500.

"The people who bought the permits were rich and could afford to

import really expensive cars. They saved a lot on import duty so they did not

mind paying money for the license," one MP said.

For example, the

lowest-priced 'C' class Mercedes Benz costs $33,000, while the 'S' class costs

$60,000. The import duty on the cars is fifty percent - a saving of between

$16,000 to $30,000. Other more expensive models sell for up to $90,000.

Asked how a letter written in the name of an MP could be 'sold' and a

car imported in someone else's name, one MP said: "Normally when we sell the

permit we write another letter saying 'I, the Member of Parliament, authorize

so-and-so to import the car instead of me.' The person then imports the car.

"The letter is probably not legally valid, but because it is from an MP

no-one asks any questions."

Asked whether authorities knew about this

practice, he said: "Of course, everyone knew. Many important figures had already

done it themselves."

Meanwhile the going rate for the permit rose to

about $6,000 late last year, after which there was a change of guard at the

Ministry of Finance.

Soon after the Finance Minister Keat Chon assumed

office in late October, he wrote to MPs saying if they sold the permits, those

who bought them would have to pay import duty like every one else.

"There was lots of grumbling among MPs. The rate for the permit stayed

at around $6,000 because no one was sure about the value of the paper," said one

MP.

A senior official at the ministry said, however, that the letter was

only a "recommendation."

Less than a month later, Keat Chon wrote another

letter reversing the earlier position, saying they were free to do what they

wished with the permits.

"He probably realized that too many important

people had already sold their licenses, including some very senior figures in

the National Assembly," one MP said.

Explaining the reversal, the

ministry official said: "The Minister had to change his position because the

parliament did not agree with him. The MPs argued that once the permit was given

to them, it was their right to do whatever they wanted with it, even to sell

it."

Since the reversal of policy, the price of the permits has risen

steadily. The MP who sold his permit last month got $8,000. But, he says,

another MP who sold it last week got $11,000. Another, according to him, simply

gave the permit to a dealer who gave him a good car in exchange. Some others are

holding on to their permits in the hope that prices will rise still further, MPs

say.

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