Public concern prompts Senate hearing on ‘Wall of China’ vehicles

Pago Pago, AMERICAN SAMOA — The Senate convened a hearing on July 24, 2025, to address the impounding of 32 unauthorized foreign vehicles from China, which have been held by Customs since May.

Testifying were Department of Commerce (DOC) Director Magdeline Lina Petaia, Treasurer Donald Kruse, and William Sili, Deputy Director of the American Samoa Environmental Protection Agency (ASEPA).

In his opening statement, Senator Utu Sila Poasa acknowledged growing public concern over the issue, noting that it has sparked widespread commentary and speculation on social media.

“Many are asking how these vehicles were permitted entry into the Territory in the first place,” Utu said.

Senator Utu informed the hearing that the vehicles, shipped directly from China in May, were inspected upon arrival by local Customs officials, who determined they did not meet federal safety standards. As a result, the fleet of Chinese-made vehicles has remained impounded at the airport warehouse, pending a final decision by the government.

According to preliminary information, the vehicles were intended for use as rental cars.

During the hearing, Senator Utu directed pointed questions to DOC Director Magdeline Lina Petaia, emphasizing that her department oversees the issuance of business licenses to foreign nationals seeking to operate in the Territory. Therefore he reasoned, they should have the answers to some of these questions.

Senator Utu further noted that new car rental operations have recently emerged in Nu'uuli and Utulei, behind the Executive Office Building (EOB). These businesses appear to be run by individuals already operating retail stores, with rental vehicles parked in front of or near these establishments, often occupying customer parking spaces and, in some cases, nearly encroaching on adjacent residential properties, sidewalks, and even the main road.

He raised questions about whether these rental operations are functioning under separate business licenses and whether they are in compliance with existing zoning regulations.

“There are clear restrictions against establishing commercial enterprises, beyond retail, in residential zones,” Senator Utu said, expressing the Senate’s concern over potential violations.

He also warned of the economic impact on local rental car businesses because the market is being flooded by these new entrants, with their “ridiculously low” rental rates. Utu said he has heard reports that the rates range from $150 to as low as $30 per day.

“Our local businesses are being undermined and cannot survive this kind of unfair competition,” he argued.

Treasurer Donald Kruse was the first to respond, stating that he had formally notified the Governor, Lieutenant Governor, Senate President, House Speaker, and Attorney General upon the arrival of the vehicles in the Territory.

He emphasized that local law expressly prohibits the importation of unauthorized foreign vehicles.

Kruse cited Title 27, Chapter 10 of the American Samoa Code Annotated, which outlines 45 rules and regulations governing the duties and responsibilities of the Customs Division.

He further explained that these provisions empower Customs to seize any contraband or imported merchandise that fails to meet federal compliance standards.

Treasurer Kruse emphasized that when the American Samoa Code Annotated (ASCA) lacks specific regulations to guide Customs officials in fulfilling their duties, the law requires the adoption of the Code of Federal Regulations (CFR). The CFR codifies the general and permanent rules published in the Federal Register by U.S. government agencies. Kruse noted that the interpretation and application of CFR provisions are context-dependent, varying according to subject matter.

He explained that the A.S. Customs Division has been working closely with the U.S. Customs Office to implement the appropriate federal rules concerning the 32 foreign-made vehicles. Through this collaboration, it was determined that the imported vehicles violate five separate federal regulations. Kruse did not disclose the specific violations.

Senator Utu asked the Treasurer whether he had consulted with the Attorney General to confirm that the issue could not be resolved under existing local regulations. Kruse responded that he had sent a formal letter to the Attorney General outlining the nature of the problem.

Senator Utu inquired whether there is a law or formal procedure that residents of American Samoa must follow when purchasing vehicles from overseas, so they can understand the import requirements in advance.

Treasurer Kruse responded that the first step Customs officials take is to verify the vehicle’s Vehicle Identification Number (VIN). He emphasized the importance of this process, noting that the first three digits of the VIN indicate the manufacturer and the country of origin.

Kruse explained that while the National Highway Traffic Safety Administration (NHTSA) maintains a database of international manufacturers that meet U.S. federal standards, this database is not available locally in American Samoa. As a result, Customs must coordinate with federal authorities to identify and validate VIN numbers and determine whether the vehicles meet the necessary import criteria.

Senator Utu expressed concern over the issue, pointing out that local business owners, including contractors like himself, often import vehicles and heavy machinery essential to their operations. He noted that such equipment is significantly more expensive than standard vehicles, and delays or denials in the import process can have serious financial and operational consequences.

Treasurer Kruse acknowledged that the American Samoa Government could face significant liability if the 32 imported vehicles currently in the Territory are found not to meet U.S. federal requirements and must be returned.

Senator Utu asked whether the company responsible for importing the vehicles had contacted Customs beforehand to confirm the standards the vehicles needed to meet before shipment.

Kruse did not answer the question but instead responded that the Deputy Attorney General is currently conducting an on-site inspection at the warehouse to determine whether all requirements have been satisfied. He added that the Treasury Department has been working with the Attorney General’s Office since the outset of the issue and has received legal guidance on the appropriate course of action.

Senator Tuana'itau Malaki Togiola noted that he had reviewed a letter from ASEPA addressed to Chief Customs Officer Juliano Falaniko, with copies sent to the Treasury Department and ASG. According to Tuana'itau, the letter confirmed that the vehicles in question had met all relevant federal air emissions criteria and standards.

“I don’t understand what the problem is,” Tuana'itau said, “since ASEPA has already confirmed the vehicles’ eligibility under federal requirements.”

ASEPA representative William Sili testified that following their inspection and evaluation, ASEPA concluded that the vehicles complied with the standards set forth by the U.S. Environmental Protection Agency (USEPA), specifically under the Air Emissions Act as codified in the American Samoa Code Annotated (ASCA).

Senator Magalei Logovii clarified the issue, emphasizing that the Treasurer holds exclusive authority to resolve vehicle importation disputes. He stressed that any individual intending to purchase a vehicle from off-island must first consult with the Customs Division before finalizing the transaction. Prospective buyers must obtain comprehensive information regarding the importation process, including the types of vehicles permitted in the Territory and the full scope of local and federal requirements that must be met before a vehicle can be released from the dock.

Senator Magalei further explained that while ASEPA is responsible for determining whether vehicles meet federal air and fuel emissions standards, a key component of the import criteria, it does not have the authority to approve or deny the entry of imported vehicles into the Territory.

He reaffirmed that the Treasurer, as the head of the department overseeing the Customs Division, possesses the legal authority to impound any vehicle that fails to meet federal safety standards. Additionally, the Treasurer may order the return of non-compliant vehicles to their point of origin.

Senator Magalei Logovii recalled a similar incident that occurred during his tenure as Government Treasurer, involving the importation of vehicles from New Zealand. At the time, Customs officials impounded the vehicles due to non-compliance with federal safety standards.

Magalei stated that he had directed Customs to notify the importer of the violation, instructing them to pay the dock fees accrued during impoundment and arrange for the vehicles to be returned to their point of origin. Ultimately, the vehicles were rerouted to Independent Samoa, where they were sold.

Senator Magalei Logovii addressed concerns raised by some members of the public who believe the government should bear the cost of storage fees and the return of vehicles that fail to meet federal standards. He firmly rejected that notion, stating that such responsibility does not fall on the government.

Magalei argued that the burden lies squarely with the importer, who chose to bring the vehicles into the Territory without first ensuring compliance with all applicable local and federal regulations. “It is not the government's obligation to cover costs resulting from private decisions made without due diligence,” he said. "Some argue that the vehicles should be released because ASEPA has given its approval."

Magalei further emphasized that the exclusive legal authority to approve or deny the entry of imported vehicles into the Territory rests solely with the Treasurer. He reiterated that this statutory responsibility is unambiguous, and he urged Treasurer Kruse to remain resolute in exercising that authority.

Treasurer Kruse acknowledged that his office had experienced lapses in enforcing the law. However, he assured the Senate that corrective measures are now in place to ensure full compliance with existing local statutes, in coordination with federal regulations, which serve as guiding standards when local law does not provide a definitive resolution.

Senator Gaoteote Palaie Tofau, who had been closely following the discussion, cut to the heart of the matter. While acknowledging the relevance of citing local and federal statutes, he emphasized that the issue had already escalated beyond legal interpretation.

“The fact of the matter is that the vehicles are already here,” Gaoteote stated. “To research the law, whether local or federal, to determine the right course of action is beside the point.”

He emphasized the core issue, which is noncompliance with federal safety standards.

“The solution is simple," he declared. "These vehicles do not meet federal safety requirements, and the law clearly states they must be denied entry. This is what happens when importers bring in vehicles without first ensuring compliance with all applicable regulations.”

Senator Gaoteote ended by saying this situation should serve as a warning for others who are planning to bring in vehicles.

“If there’s one positive outcome from this situation, it’s that future importers will be more diligent. Anyone planning to purchase a vehicle off-island and bring it to the Territory must ensure full compliance with both local and federal laws. That’s the only way to guarantee their vehicle will be released upon arrival.”

Senator Noa F. Vae, wanting to know ASEPA's capacity to monitor vehicle emissions locally, asked ASEPA representative William Sili if their office had facilities on-island to test fuel emissions of vehicles. Sili replied no.

Senator Leatualevao Asifoa raised concerns regarding the release of impounded vehicles currently held at the airport warehouse. He noted that while the vehicle brands were unfamiliar, similar models had been seen on-island the previous year. According to the Senator, some of these vehicles are used by Chinese business owners engaged in wholesale operations, primarily for delivering goods and merchandise to customers.

Leatualevao questioned the circumstances surrounding their initial release: “Who authorized these vehicles to be cleared upon arrival?” He expressed his belief that local sponsors, specifically Samoans supporting Chinese and other Asian business operators, may have played a role in facilitating their release through improper means.

He alleged that these sponsors leverage personal connections within government departments and agencies involved in the importation process, using their influence to pressure or bribe employees into approving the vehicles. Leatualevao emphasized that the responsibility lies not with agency leadership or directors, but with individual staff members who may be susceptible to such influence.

In response, Treasurer Kruse stated that he was unaware of how the unauthorized vehicle models, such as those currently impounded, were initially released. He explained that the clearance occurred under the previous administration, and therefore, he cannot provide the details surrounding their entry and approval.

He further noted that although the vehicles were initially imported as personal-use vehicles, they are now being utilized for commercial purposes by Chinese wholesale operators.

Kruse stated that he has consulted with Police Commissioner Ta’aga Saite Moliga regarding the issue. Together, they are exploring the possibility of retroactively charging the appropriate 15 percent commercial import duty that should have been applied when the vehicles first entered the territory.

Senator Tuana'itau Malaki Togiola remarked that the impounded vehicles were likely brought in due to their affordability. He cited the “Great Wall” truck model, which he said costs around $19,000, significantly less than a Ford truck of comparable size, which can range from $80,000 to $90,000 when purchased locally. He added that larger models such as the Ford F-250, F-350, or F-450 can cost up to $200,000.

"If a Ford, Chevy, Nissan, and Great Wall stood side by side, I would buy the Great Wall because it's much cheaper," Tuana'itau stated.

Senator Olo Uluao Letuli commended Treasurer Kruse for his diligence in identifying and halting the entry of unauthorized vehicles. He urged continued vigilance, noting that vehicles have previously been used to smuggle drugs and other contraband. Olo also advised the Treasurer to investigate whether any government employees may have played a role in facilitating the release of these vehicles.

Committee Chairman Senator Utu concluded the hearing with a series of recommendations addressed to the Treasurer and the DOC Director.

Utu advised Kruse that if Police Commissioner Ta’aga Saite Moliga permits continued use of the unauthorized vehicles already released, then the Office of Motor Vehicles (OMV) should ensure that these vehicles meet safety standards for operation on public roads.

Turning to the DOC Director, Utu recommended that if the impounded vehicles are eventually released and repurposed as rental cars, the importer should be required to pay the full 15 percent commercial import duty. He further urged the Director to carefully assess the broader economic impact of new business entrants, cautioning that an influx of competition could overwhelm the local market and threaten the viability of existing businesses.

Senator Utu emphasized that zoning regulations must be a key consideration when evaluating business license applications, particularly due to the potential negative impact on surrounding communities. He advised that applications for car rental operations should be subject to strict conditions, including adequate parking space. If such space is lacking, Utu stated, the application should be denied outright.

Utu further recommended that if the impounded vehicles are eventually released, DOC  should prohibit their registration as rental cars.

“We have to punish these people," Utu said with disapproval. "They imported these vehicles knowing full well that they are unauthorized and do not comply with federal standards. So if they cannot use them as rentals, they'll have to sell them to the community. If they have to sell them for $50 each, that's their problem!”

In closing, Senator Utu requested an updated inventory of all companies and businesses currently leasing lots at the Tafuna Industrial Park. He asked that the list include the start dates of each lease and the cost per square foot.