Court reacts to Toyota bribery scandal


Court reacts to Toyota bribery scandal

Panel set up, accused judges file computer crime complaint

The Customs Department is a party to a case in which Toyota Motor Thailand has challenged its valuation of auto parts imports. Three Thai judges were allegedly involved in the case. (Bangkok Post file photo)
The Customs Department is a party to a case in which Toyota Motor Thailand has challenged its valuation of auto parts imports. Three Thai judges were allegedly involved in the case. (Bangkok Post file photo)

The Court of Justice has set up a 10-member panel to follow up on the Toyota bribery scandal while the accused senior judges are preparing to take legal action against people mentioning them by name, especially in social media.

Suriyan Hongvilai, spokesman for the Court of Justice, said on Saturday that the panel had been set up on Friday and tasked with checking and following up the case, according to Thairath Online.

Isra News Agency also reported that three Thai judges mentioned in a Law360 article about the possible bribery would ask the Court of Justice  on Monday to file a computer crime complaint with police to take legal action against those who mentioned them by name or shared such news on social media.

Chaisit Trachutham, one of the accused senior judges, confirmed with ThaiPBS on Friday that he had been involved in the case while serving as a senior judge on the Special Appeal Court.

He said he had been assigned to handle 10 cases involving Toyota Motor Thailand (TMT) on which he had split opinions.

The judges’ panel had a different opinion than that of the president of the Special Appeal Court, so the cases were brought to a meeting of the court.

At that meeting, Mr Chaisit said he had supported the case against TMT. After the discussion, a vote was taken and 60 of 70 judges present agreed the court should rule against the automaker.

In the interview with ThaiPBS, Mr Chaisit also questioned why TMT had not uttered a word, especially on the allegation that it had hired a law firm to lobby judges in a multi-billion-baht tax case and how much the law firm was paid.

Meanwhile, Slaikate Wattanapan, another judge mentioned in the report and a former Supreme Court president, told Thai media he had never discussed the Toyota cases with the other two judges.

Background

The case dated back in 2010-14 when TMT imported parts for its Prius hybrid car model. The Customs Department initially declared them as auto parts that were subject to a 10% import tax.

But after rechecking, officials concluded they were not random parts to complement locally made parts in assembling a car.

In their view, the items were completely knock down (CKD) parts in matching quantities that could be assembled into 200 cars. The law treats such parts as assembled cars. As such, TMT would be liable for an 80% import tax levied on CKD kits.

TMT was therefore ordered to pay an additional 11.6 billion baht in import tax and other related taxes.

TMT argued that it imported the parts from Japan under the Japan-Thailand Economic Partnership Agreement. It argued that the case was a matter of interpretation and that it had already sent clarifications and explanations to the Customs Department in late 2013.

Besides, since 2012, the department had let importers to use third-party invoicing, which allows importers to enjoy benefits from trade deals that Thailand has with other countries.

TMT appealed the valuation to a Customs appeal committee, which dismissed its petition. It then filed a case with the Central Tax Court in 2015 and won it two years later.

The Special Appeal Court later overturned the ruling. TMT is now in the process of appealing the ruling to the Supreme Court.

Law360, a news website for law professionals, reported that Toyota Motor Corporation had hired a consulting firm to investigate whether TMT, its Thai subsidiary, had violated the US Foreign Corruption Practices Act or the UK Bribery Act. The former prohibits US citizens and entities from bribing foreign government officials to benefit their business interests.

Toyota revealed to shareholders in March this year that it had informed the US Securities and Exchange Commission and the US Department of Justice in April 2020 about “possible anti-bribery violations” related to its Thai subsidiary.

The website reported that documents it obtained exclusively and court filings showed the company had previously conducted its own investigation to determine whether TMT violated the US and UK laws by making payments to outside law firms or consultants. Those payments, it said, may have been passed to or shared with Thai judges, court advisers or others in an effort to secure a favourable outcome in the Prius tax case.

In the latest development, US federal prosecutors have formed a grand jury in Texas, where Toyota has its US headquarters, to seek any evidence that the carmaker had bribed top Thai judges to overturn the tax judgement, according to Law360, which quoted a US law enforcement official and documents related to the investigation.



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